United Technologies Corp. (NYSE: UTX) is trading higher on what would have been considered bad news in other economies or in different times. The company announced an additional $600 million of restructuring actions for 2009 to now come to a total of $750 million. Yep, you guessed it: layoffs. The company is cutting its global workforce by 11,600. It is also slashed 2009 guidance.
These cuts are primarily from overhead and SG&A and additional hourly workforce reductions may occur based on market-driven production volume changes.
The company anticipates 2009 revenue of $55 billion (including $1 billion in first time adoption of engine collaboration agreements), which is actually about $2.7 billion below the December guidance. Earnings are also now expected to be $4.00 to $4.50 EPS for the year, although that includes $0.30 to $0.40 for the $750 million restructuring costs (net of anticipated one-time gains of $200 million to $350 million).
First Call has 2009 estimates at $4.61 EPS before items and revenues are expected to be $55.2 billion. Those numbers have come down over the last quarter from analysts, so it looks like the company’s guidance is just catching up to where the Street already expected.
The company continues to expect 2009 cash flow from operations less capital expenditures equal to or in excess of net income. UTC also revised share repurchase guidance for the year to $1 billion from $2 billion while preserving the usual acquisitions placeholder of $2 billion.
Shares are actually up almost 2% at $38.25 before the open. It just hit a new 52-week low yesterday and its 52-week high was $75.86.
JON C. OGG
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