Hartford conglomerate United Technologies Corp. reported a less than 1 percent rise in quarterly profit, as a slowing Chinese economy and Europe’s financial woes eroded demand for its elevators and cut into sales of spare jet engine parts, Reuters reports.
The world’s largest maker of elevators and air conditioners said on Thursday that second-quarter net income attributable to common shareholders came to $1.33 billion, compared with $1.32 billion a year earlier.
Earnings from continuing operations rose to $1.62 per share from $1.41, the company said.
After the earnings announcement, the manufacturing company’s shares were up nearly 2 percent in early morning trade. Analysts had expected the company to report earnings excluding items of $1.41 a share on $14.45 billion in revenue, according to a consensus estimate from Thomson Reuters.
On Wednesday, UTC announced that it has agreed to sell industrial businesses of its Hamilton Sundstrand subsidiary to Carlyle Group LP and BC Partners Ltd for $3.46 billion, a deal that will help fund United Tech’s largest-ever acquisition.
The transaction, which is expected to close in the fourth quarter, underscores private equity’s appetite for assets being carved out of industrial conglomerates and the still-robust financing markets for leveraged buyouts in the United States.
Diversified U.S. manufacturer United Tech put three units, including the Hamilton Sundstrand industrial businesses, on the auction block in an effort to fund its $16.5 billion takeover of aircraft components maker Goodrich.
Reuters reported on Monday that two buyout firms had teamed up and were in advance discussions to buy the pump and compressor businesses within Hamilton Sundstrand for about $3.5 billion.
Hamilton Sundstrand makes fluid control products and pumps under the Milton Roy and Sundyne brands. It also manufacturers air compressors under the Sullair brand.
The Associated Press reports the Justice Department said Thursday that UTC must sell some assets in order to proceed with its purchase of Goodrich because the the merger, as first proposed, would have resulted in higher prices, less favorable contractual terms and less innovation for several aircraft components.
The department filed a proposed settlement in federal court that would resolve competitive concerns about the deal between United Technologies, based in Hartford, Conn., and Charlotte, N.C.-based Goodrich, which makes jet components such as landing wheels and brakes.
“The acquisition as originally proposed would have lessened the vigorous competition that currently exists among manufacturers of large main engine generators, aircraft turbine engines and engine control systems for large aircraft turbine engines,” Jamillia Ferris, chief of staff and counsel at the Justice Department’s antitrust division, said in a statement.
