(Reuters) - A day after sealing the signature move of his eight-month tenure, United Technologies Corp (UTX.N) Chief Executive Greg Hayes suffered his toughest day on Wall Street.
The U.S. conglomerate cut its 2015 profit forecast on Tuesday for the third time this year, sending its shares down more than 7 percent and carving $7 billion off its market value.
“To say that I’m disappointed would be a significant understatement,” Hayes told analysts on a conference call.
United Tech agreed on Monday to sell its Sikorsky helicopter unit to Lockheed Martin Corp (LMT.N) for $9 billion, ending a strategic review that Hayes initiated in March.
After the latest forecast cut, blamed on weaker expected performance in its aerospace systems and Otis elevators businesses, Hayes vowed he would take “another hard look” at restructuring, including potential cost cuts. He told analysts he was “spending more time on the road to make sure that we truly understand what’s going on in these individual businesses.”
The lowered outlook is a setback for Hayes, the company’s former finance chief. Since taking over as CEO in late November, the company cut its profit forecasts in January and June.
One analyst described the repeated cuts as “water torture” on the conference call.
The company’s shares are down 11 percent for the year to date, against a nearly 3 percent increase for the S&P 500 index .SPX. The shares have underperformed those of rivals General Electric Co (GE.N) and Honeywell International Inc (HON.N).
Sterne Agee analyst Peter Arment said investors were particularly caught off guard with the forecast for UTC Aerospace Systems (UTAS), for which the company expects to see about $300 million less in profit before tax this year than it did in March.
“That was not priced into the stock,” Arment said of the aerospace outlook cut. “Clearly, they need to transform some of the businesses so they can get back to growing.”
For Otis, United Tech dimmed its view of new equipment sales in China and for service revenue in Europe, cutting its profit forecast for the business by $200 million this year.
“We just got way too aggressive on the aftermarket at UTAS, and the European recovery, and it hasn’t happened,” Hayes said. “It all ultimately falls on me.”
Additional reporting by David Gaffen in New York; Editing by Bill Rigby