United Tech CEO: 'some concern' in oil price

AP News
Posted: May 17, 2011 3:53 PM
United Tech CEO: 'some concern' in oil price

The chief executive of United Technologies Corp. said Tuesday that rising commodity prices and supply chain disruptions in Japan are causing some concerns, but orders are rising and the weak dollar is boosting the conglomerate's exports.

Louis Chenevert, CEO of the parent company of Sikorsky Aircraft, Otis elevator and other businesses, said at an investor analyst conference Tuesday that higher gas prices and inflation worries will likely crimp consumer spending. It's also expected to affect subsidiary Carrier's air conditioning sales and airline customers of aviation subsidiaries Pratt & Whitney and Hamilton Sundstrand.

However, he said the problems, which include supply interruptions in Japan following the March 11 earthquake and tsunami, are "well manageable within the UTC scope."

He also said the weaker dollar "will have some benefits," because they make the company's goods cheaper abroad.

About 60 percent of United Technologies' $54.3 billion in revenue last year was from sales outside the United States.

Chenevert said the Hartford-based company also benefits from continued strength in orders "across the board." He singled out gains at Carrier, which has benefited from its improving transport refrigeration business and restructuring by United Technologies.

"The bottom line is that Carrier is very well positioned to capitalize on market recovery and growth," Chenevert said.

United Technologies raised its 2011 profit guidance last month to between $5.25 and $5.40 per share from $5.20 to $5.35 per share. Chenevert backed the guidance, saying he's "highly confident" in the outlook.

Chenevert said sales in emerging markets in Brazil, China, India and Russia accounted for 20 percent of total sales, the first time sales from those markets outpaced military sales, which accounted for 18 percent of total revenue.

In China, he said the fastest growth is in central and western provinces. At Otis, 20 percent of new equipment sales in China were from central and western provinces six years ago, Chenevert said. That's expected to jump to 40 percent in the next two years, he said.