Net profits for United Technologies Corp. rose 8 percent in the second quarter, to $1.7 billion, the company reported Tuesday.
Sales increased 7 percent, to $17.2 billion, with less than half of the gain from organic growth. The bulk of the increase was a major helicopter sales deal with the Canadian government, a long-delayed program that also accounted for $438 million in losses during the quarter.
Quarterly profit from continuing operations of $1.84 a share was higher than the $1.70 average expected by Bloomberg analysts. It was also up from $1.70 in the same quarter a year ago.
The state's largest private employer also reported its first benefits from a state tax-incentive package that was estimated at $400 million. The earnings report said it realized a gain of about $220 million during the period. Income tax adjustments from past tax years added $253 million to the bottom line.
The adjustments were both from federal taxes in 2009 and 2010 and from the settlement of state income taxes after Hamilton Sundstrand merged with Goodrich and the division moved its headquarters to North Carolina. The company also benefited from $95 million in retroactive Research and Development tax credits at the federal level.
UTC Aerospace Systems, the division formed by that merger, had the strongest profit margin of the three divisions with significant manufacturing operations in the state. UTC Aerospace Systems, which had an increase of commercial spares orders of 28 percent, had a 16.6 percent operating margin in the quarter.
Pratt & Whitney, where commercial engine spares orders were down 6 percent, had a 12 percent profit margin.
Sikorsky had a 13.3 percent loss, or $317 million, because of the losses related to the Canadian rescue helicopter sales.
Otis's profit margin was highest among all of the conglomerate's divisions, at 20.6 percent, as sales of elevators and escalators grew 3 percent, led by 44 percent growth in North America.
UTC increased its earnings per share guidance by 10 cents at the low end of the range, now projecting earnings per share of $6.75 to $6.85. It had also increased its guidance by 10 cents in the first quarter.
The company said it also expects to buy back more shares in 2014. Earlier, it said it would buy $1 billion of its own stock. Now it projects $1.25 billion in share repurchases. Share buybacks increase earnings per share, because with fewer shares outstanding, the relative value of each share rises.
Louis Chênevert, United Technologies' chief executive, said UTC delivered a strong first half of the year. "Our solid backlogs, organic growth trends and focus on execution give us confidence to increase the lower end of our earnings per share range."
Shares fell $2.12, to $110.86 Tuesday, a drop of less than 2 percent. On Tuesday, the Dow Jones Industrial average, which includes UTC, was up 0.36 percent.Copyright © 2015, CT Now