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UTC Expands 2009 Restructuring to $750 Million In Response to Global Economies; Employment Reductions of 11,600 Expected; Earnings Guidance Revised to Range Of $4.00 To $4.50 Per Share

Written by thomas · Filed Under Aeronautics News 

March 10, 2009

thomas

HARTFORD, Conn., March 10 /PRNewswire-FirstCall/ — United Technologies Corp. (NYSE: UTX) President and Chief Executive Officer Louis R. Chenevert announced $600 million of additional restructuring actions for 2009 and now expects restructuring for the year to total $750 million. These actions will result in global employment reductions of 11,600, primarily from overhead and SG&A reductions throughout UTC. Additional hourly workforce adjustments may occur during 2009 based on market driven production volume changes. The expanded restructuring responds to anticipated 2009 revenues $2.7 billion below the company’s December guidance due to contracting markets worldwide.

Earnings per share guidance is being revised to a range of $4.00 to $4.50, including $0.30 to $0.40 for the $750 million of total 2009 restructuring costs net of anticipated one-time gains of $200 million to $350 million. Consistent with prior guidance, the earnings per share range excludes the impact of acquisition-related costs, if any, resulting from the adoption of SFAS 141(R). The revised revenue guidance of approximately $55 billion also includes $1 billion from the first-time adoption of EITF Issue No. 07-1, which covers revenues associated with engine collaboration agreements. The company continues to expect 2009 cash flow from operations less capital expenditures equal to or in excess of net income.

“The outlook for commercial aerospace and global construction markets has continued to deteriorate since UTC’s December investor meeting and the economic recovery previously anticipated in the second half of 2009 now appears unlikely,” said Chenevert. “These expanded restructuring actions are required to protect UTC profitability and are expected to position the company for resumed earnings growth in 2010. In 2008, UTC anticipated slowing economies for 2009, although not at the severity which has since developed. Savings from 2008 and 2009 restructuring and other 2009 actions will result in total cost reductions exceeding $1 billion in 2009. Employment reductions will total approximately 18,000 or slightly more than 8 percent over the two years. These difficult actions will allow us to continue outperforming peers.”

UTC also revised share repurchase guidance for the year to $1 billion from $2 billion while preserving the usual acquisitions placeholder of $2 billion. “We want to be in a position to take advantage of strategically attractive opportunities that may arise in the current market conditions. UTC’s strong balance sheet and operating cash flows enable us to do this,” Chenevert added.

United Technologies Corp., based in Hartford, Connecticut, is a diversified company that provides a broad range of high technology products and support services to the building systems and aerospace industries.

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