The CEO of United Technologies Corp. said Thursday that the industrial conglomerate is scaling back the amount of stock it will issue to finance its $16.4 billion purchase of aerospace supplier Goodrich Corp.
It also raised its 2012 profit guidance to $5.40 to $5.60 per share from $5.30 to $5.50 a share, including the Goodrich acquisition.
Chief executive Louis Chenevert told analysts and shareholders at a conference Thursday that the company expects to issue $2 billion or less in stock, down from $4 billion that executives said last year could be issued.
"Obviously, I hate equity issuance," he said. "I think there's a clear path to have equity of $2 billion or less."
Alternatives include using cash and proceeds from the sale of noncore businesses, Chenevert said. More details on how the Goodrich deal will be financed will be announced at United Technologies' annual analysts meeting on March 15, he said.
The Hartford, Conn.-based company has been telling investors for months that it's reluctant to issue stock to pay for Goodrich, which is based in Charlotte, N.C. Chief Financial Officer Greg Hayes told analysts earlier this month that United Technologies wants to minimize the amount of equity it will issue to maintain its credit ratings.
Chenevert also said United Technologies, which owns Carrier heating and cooling, Otis elevator, jet engine manufacturer Pratt & Whitney and other businesses, will resume the share buyback program that was suspended when the Goodrich deal was announced. He did not say when share repurchases will start.
"We expect as we complete this transaction midyear we will talk more about resuming, eventually, share buyback," Chenevert said.
When United Technologies announced the Goodrich deal in September, it said the aerospace and defense company will be a good addition that will allow it to take advantage of rapidly growing demand for aircraft components.
United Technologies shares fell 20 cents to $83.75 in midday trading.