United Technologies Corp. (UTX) reported a 7% drop in earnings for the third quarter due to restructuring charges as well as higher costs and expenses. However, the results exceeded analysts’ expectations. The aerospace and industrial company raised adjusted earnings guidance for the full year 2018.
Net income fell by 7% to $1.2 billion and earnings dropped 8% to $1.54 per share. The results included 39 cents of net restructuring charges and other significant items. Adjusted EPS increased 12% to $1.93.
Sales grew 10% to $16.5 billion. This included 8 points of organic sales growth, 3 points from the absence of the nonrecurring charge incurred at Pratt & Whitney in the previous year quarter and 1 point of foreign exchange headwind.
In the quarter, commercial aftermarket sales were up 9% at Pratt & Whitney and up 12% at UTC Aerospace Systems. Otis new equipment orders were up 9% organically versus the prior year. Equipment orders at UTC Climate, Controls & Security increased 13% organically.
Looking ahead into the full year 2018, the company raised its adjusted EPS guidance to the range of $7.20 to $7.30 from the previous estimate range of $7.10 to $7.25. Sales outlook was narrowed to the range of $64 billion to $64.5 billion from the prior range of $63.5 billion to $64.5 billion.
Organic sales growth is now predicted to be about 6% compared to the previous forecast range of 5% to 6%. The company maintained its previously provided free cash flow expectations of $4.5 billion to $5.0 billion. The guidance excludes the impact of the pending acquisition of Rockwell Collins (COL).
“We are well positioned to close out the year as we continue to execute on our strategic priorities. The acquisition of Rockwell Collins, once complete, will further strengthen our position as a premier systems supplier to the aerospace industry,” Chief Executive Gregory Hayes said.
Shares of United Technologies opened higher and remained above 2% in the early trade on the NYSE. The stock has risen over 7% in the past year and over 1% in the year so far.