UTC chief: Rockwell Collins has given company 'real heft on the military communication side'

By Marjorie Censer / April 23, 2019 at 11:02 AM

United Technologies said today it saw “strong growth” in its intelligence, surveillance and reconnaissance work as well as its space business.

During a call with analysts Tuesday, Greg Hayes, the company's chief executive, said its acquisition of Rockwell Collins has bolstered the company's defense work, giving it “real heft on the military communication side.”

Both Pratt & Whitney and Collins Aerospace Systems had “really, really strong quarters,” Hayes added.

“We shouldn't forget that we have a very, very solid position on the defense systems side,” he continued. “Defense spending goes up and down. We know that. Has it peaked? I'm not sure.”

But the company's defense programs “have a lot of runway,” Hayes said.

Pratt & Whitney today reported quarterly sales of $4.8 billion, up about 11 percent from the same three-month period a year earlier. Quarterly profit reached $433 million, up about 5 percent from a year earlier.

Collins Aerospace Systems reported much higher sales and profit as a result of the addition of Rockwell Collins. The unit recorded quarterly sales of $6.5 billion, up 71 percent from the prior year, while profit reached $856 million, up almost 46 percent from a year earlier.

Hayes told analysts the company's planned split into three companies, which separates Otis and Carrier into independent companies, is on track.

More than 500 people are working on the separation, Hayes said, and the company will be “operationally ready” to split by the end of the year.

He said UTC has completed its tax filings in Canada and the United States and is waiting for rulings, which he said is a six- to nine-month process.

“There is a tremendous amount of work going on to get these two businesses set up,” Hayes said. “But I think, again, it's all on track.”

He said the company expects to name the new management teams by the end of the second quarter.