HARTFORD, Conn. (AP) — United Technologies Corp., which manufactures elevators, jet engines, heating and cooling equipment and other aerospace and building components, reports its fourth-quarter earnings Wednesday before the market opens. Investors will be watching to see if it closed out the year as strongly as it performed in the previous three quarters, and for more details about how the conglomerate will digest its $16.4 billion acquisition of Goodrich Corp.
WHAT TO WATCH FOR: Hartford, Conn.-based United Technologies is the parent company of Otis elevator, Carrier heating and cooling, aerospace parts maker Hamilton Sundstrand, jet engine maker Pratt & Whitney and other businesses that mirror the aerospace and commercial and residential real estate markets.
The company posted double-digit profit increases in the first three quarters of 2011 on rising orders in most of its businesses.
But military sales are slowing as U.S. troops leave Iraq and draw down in Afghanistan. As a result, sales are expected to slow at helicopter subsidiary Sikorsky Aircraft.
Edward Jones analyst Matt Collins wrote in a note to investors that a key risk to his "Buy" rating is a "muted rebound" in commercial aerospace and construction markets.
In addition, overseas operations expose United Technologies to "currency and geopolitical risks," he said.
The company warned investors last spring that rising oil prices and disruptions in supplies in Japan following the March earthquake and tsunami could hurt its airline customers.
United Technologies raised its 2011 profit forecast three times last year.
Still, CEO Louis Chenevert told investors last month that despite strong holiday sales and improved U.S. consumer sentiment, housing and employment remain very weak, particularly in Europe.
He said the acquisition of Goodrich could push revenue up 10 percent this year but will not add to profit until 2013.
When it announced its purchase of Goodrich, United Technologies said the aerospace and defense company is a perfect addition that will allow it to take advantage of rapidly growing demand for aircraft components. Goodrich makes aircraft components including landing systems, wheels and brakes, along with systems for military aircraft. The deal is expected to create a $66 billion company, with a little less than half of its sales coming from aerospace, United Technologies said.
WHY IT MATTERS: Results could indicate the health of aerospace and building systems markets and the strength of exports and whether the strengthening dollar is hurting exports. A stronger dollar makes U.S. goods appear more expensive to overseas buyers.
WHAT'S EXPECTED: Analysts are expecting earnings per share of $1.46 and revenue of $15.06 billion, according to FactSet.
LAST YEAR'S QUARTER: United Technologies reported per-share earnings of $1.31 and $14.86 billion in revenue.
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