United Technologies' net income from continuing operations rose more than 19 percent during the first quarter even as the company acknowledged some drag from slowing economic growth in the United States, China and Europe.
The diversified manufacturer posted earnings from continuing operations of $1.26 billion, or $1.31 per share, if the businesses that it put up for sale are factored out. That compares with those same operations last year of $1.05 billion, or $1.06 per share.
That easily topped Wall Street expectations of $1.21 per share, and the company's stock edged higher in early trading.
The parent company of jet engine maker Pratt & Whitney, Otis, Carrier heating and cooling said revenue was $12.42 billion in the January-March quarter, down 2 percent from the same period last year.
It was the first drop in revenue since early 2010 and the company said the costs of a major restructuring that is under way will cost more due to what Chief Financial Officer Greg Hayes said will be a "tough year."
The company last month announced the sale of numerous businesses, including rocket engine and wind power operations, for $3 billion in order to help finance a $16.5 billion acquisition of aerospace supplier Goodrich. It also will take on between $8 billion and $10 billion in short- and long-term debt, use $3 billion in cash and $1.5 billion in mandatory convertible issues.
Including the discontinued operations, net income fell to $330 million, compared with $1.01 billion last year. Carrier is credited for helping boost earnings toward the end of the quarter with stronger residential orders in North America, "obviously, better than we expected," Chief Financial Officer Greg Hayes told investor analysts in a conference call Tuesday. However, new equipment orders for Otis elevator fell in China and refrigerated truck sales declined in Europe.
Sales were down slightly at Otis elevator as orders fell 9 percent over the first quarter of 2011, driven by a slow start to the year in China, which was expected. Hayes said efforts by the government to bring down housing prices has hurt higher end residential sales that represent about half of Otis sales in China.
In addition, Otis raised prices in response to cost increases in metals in China, resulting in some order declines, he said.
Carrier's transport refrigeration fell about 15 percent, primarily in truck trailer sales in Europe as the economy "continues to sputter," Hayes said.
However, sales rose for commercial refrigeration and in other areas of Carrier's business, he said.
Citing the "uneven economic environment," United Technologies said it will spend $450 million on restructuring costs to this year, up from previous predictions of $350 million. It expects one-time gains to rise to $600 million, from $500 million.
"It's going to be a tough year this year but I think it will be a solid year and we'll be able to deliver on the commitments," Hayes said.
United Technologies, based in Hartford, Conn., backed its previous guidance of per-share earnings of $5.30 to $5.50 for the year. That would be flat to up 4 percent from 2011.
Company shares rose 4 cents to $79.79 in early trading.