United Technologies Corp. on Thursday raised the lower end of its profit guidance for 2011, saying businesses such as elevators, commercial plane spare parts and heating and air conditioning systems are doing well in the economic recovery.
The Hartford conglomerate told analysts at its annual presentation in New York that it expects to earn between $5.20 and $5.35 per share this year, up from a prior range of $5.05 to $5.35 per share. The parent company of Otis elevator, Carrier heating, ventilating and air conditioning, Sikorsky Aircraft and other businesses backed its 2011 revenue forecast of $56 billion to $57 billion.
Chief Executive Louis Chenevert credited United Technologies' short-cycle businesses _ commercial airline spare parts and installation and repair of elevators and building heating, ventilation and air conditioning systems for the guidance revision.
"We are off to a great start with continuing strength in our short-cycle businesses and are confident of achieving double digit earnings growth in 2011 in spite of rising commodity costs and higher technology investments," he said.
Analysts surveyed by FactSet are already expecting earnings of $5.35 a share and revenue of $57.07 billion for 2011.
United Technologies shares tumbled $1.97, or 2.4 percent, to $80.92 in late trading amid a broad market selloff.
United Technologies raised the lower end of its earnings guidance despite looming problems.
"We got the Middle East, we got oil impact potentially but at the same time ... we have high confidence," Chenevert told investment analysts.
Rick Whittington, an analyst at Sturdivant and Co., said United Technologies is in a strong position as the economy improves.
"The economic cycle still benefits UTC businesses," he said.
The improvements were already seen last year. In its 2010 fourth quarter, United Technologies said stronger results from its airline commercial spare parts business and heating and cooling building systems operations helped push profit up 11.7 percent. "We've really seen the trend of Q4 kind of carry through so far in Q1," Chenevert said.
Chief Financial Officer Greg Hayes said United Technologies' markets are doing as well as executives forecast in December.
"We still feel the trends are holding although there is a question mark as we see what the impacts of these higher oil prices are for the rest of the year," he said.
Carrier is doing better than expected, he said, calling it a "pleasant surprise."