United Tech CFO declines comment on Sikorsky
Feb. 06, 2014
HARTFORD, Conn. (AP) — The chief financial officer of United Technologies Corp. declined to comment Thursday about a report that the conglomerate could sell or spin off Sikorsky, but said the helicopter maker has a "very bright future."
Chief Financial Officer Greg Hayes, questioned at an aerospace defense conference, said the Hartford, Conn., aerospace giant periodically reviews its portfolio of businesses.
"If we comment on this rumor we'll have to comment on every subsequent rumor," he said. "So I can't say yes, we're selling Sikorsky or no, we're not selling Sikorsky."
Defense News, citing sources it did not identify, reported on Jan. 27 that United Technologies is considering whether to sell or spin off Sikorsky or negotiate a merger.
Sikorsky, the maker of the Black Hawk helicopter, is feeling the impact of reduced military spending due to budget cuts and a scaled-back U.S. presence in Afghanistan. Still, Hayes said he's optimistic about the Stratford, Conn., subsidiary.
"It has a very bright future but a tough couple of years," Hayes said. "There's nothing but upside at Sikorsky in my view."
Combat helicopters are fully funded, he said, and he believes United Technologies has a "very good chance" to win contracts for the new presidential helicopter.
"We also have a huge international marketplace that's going to play out this year," Hayes said.
Revenue and profit at Sikorsky have fallen in each of the last two years. Revenue in 2013 was $6.25 billion, down 8 percent from 2012 and off by 15 percent from 2011. Profit last year was $594 million, down 17 percent from 2012 and 29 percent lower than in 2011.
Sales of the Black Hawk, which the military has relied on as a workhorse helicopter striking targets and ferrying troops in Iraq and Afghanistan, have fallen about 20 percent year over year, Hayes said in January.
United Technologies expects its other subsidiaries to benefit from an improving economy, Hayes said. It expects the global economy to grow about 3.5 percent this year and the U.S. economy, led by housing, to grow by 2.5 percent to 3 percent.
United Technologies Corp., parent company of the Carrier heating and ventilating equipment manufacturer, expects housing starts to be up 25 percent in 2014. Two other subsidiaries, jet engine maker Pratt & Whitney and aerospace parts manufacturer Goodrich Corp., will benefit from strong airline industry profit, Hayes said
Airlines are expected to earn $20 billion in profit this year "and when airlines make money they buy parts, they buy planes and everything is good," he said.
UTX shares rose $1.54, or 1.4 percent, to close at $109.45 on Thursday.