United Technologies (UTC) says yearly sales will be at the lower end of its guidance range after witnessing a steep drop in commercial aircraft spares in the third quarter.
UTC completed the acquisition of Rolls-Royce's ownership stake in International Aero Engines (IAE) during the quarter, which increased the company's overall commercial spares orders by 14% compared to the same period a year ago.
Excluding IAE's share of the orders, the organic commercial spares business declined 21% at Pratt & Whitney and 6% at UTC Aerospace Systems, which combines Hamilton Sundstrand and Goodrich.
UTC posted a 5.67% increase year-over-year in overall sales to $15 billion. Net income in the third quarter grew 6.3% compared to the same period last year.
Among the company's three aerospace divisions, the addition of Goodrich led to a 79% year-over-year gain in revenues from UTC Aerospace Systems. But operating profit margin dropped from 17.2% to 10.1%.
Pratt & Whitney also realised a 16% increase in quarterly revenues, including IAE's stake in the company, while operating margin dropped from 16.1% to 11.4%. Sikorsky, meanwhile, reported a 12% reduction in revenues, while operating margin improved from 11.5% to 12.3%.