By Lewis Krauskopf
(Reuters) - United Technologies Corp posted an 8 percent increase in quarterly profit, topping estimates, as sales of its elevators and aircraft parts helped offset a sluggish performance in its Pratt & Whitney engine business.
The diversified U.S. manufacturer also gave a more bullish profit outlook for 2014.
The maker of Sikorsky helicopters and Otis elevators said second-quarter net income rose to $1.68 billion, or $1.84 per share, from $1.56 billion, or $1.71 per share, a year earlier.
Analysts on average were looking for $1.71 per share, according to Thomson Reuters I/B/E/S.
Revenue rose 7 percent to $17.19 billion.
United Tech posted organic revenue growth of 3 percent, which excludes sales from a helicopter agreement with Canada and net divestitures.
The company said last month that it had signed a revamped agreement to provide Canada with maritime helicopters from its Sikorsky unit, with the deal leading to higher revenue in the second quarter but also to a $438 million charge against earnings.
"Although EPS was a beat in the quarter, we think results on an underlying basis were essentially in-line, with restructuring and one time charges/gains...clouding expectations," RBC Capital Markets analyst Robert Stallard said in a research note.
Spare part orders at United Tech's aerospace components unit, UTC Aerospace Systems, jumped 28 percent, but spare commercial engine orders dropped 6 percent at Pratt & Whitney. Sales at Pratt edged down 0.9 percent to $3.59 billion.
While sales at Otis rose 7 percent, new equipment orders increased only 3 percent. Analysts have been concerned that a potential slowdown in building in China could hamper United Tech's sales of elevators and other products for commercial buildings, such as climate-control and security systems.
"The Otis number suggests significant slowing in China," JPMorgan analyst Joseph Nadol said in a note.
United Tech projected 2014 earnings of $6.75 to $6.85 per share, raising the low end from $6.65. It expects sales of about $65 billion this year.
The company said it now expected less than $1 billion in acquisitions for 2014, after previously projecting about $1 billion in deals. It expects to buy back $1.25 billion in shares this year, up from $1 billion previously.
At its March investor day, United Tech signaled that it would probably be more interested in bigger than smaller deals, and was more likely to make an acquisition to support its business serving commercial buildings than for its aerospace business. But executives also said at the time they did not see such a deal imminently.
Shares of United Tech rose 0.6 percent to $113.65 in premarket trading. Through Monday, the stock had fallen 0.7 percent this year, compared with a nearly 3 percent rise for the Dow Jones industrials index.
(Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn and Chizu Nomiyama)