United Technologies is anticipating better-than-expected 2019 results from its Collins Aerospace business following a quarter in which the unit’s profits more than doubled.
Collins Aerospace earned a $1.2 billion operating profit in the second quarter, up from $569 million during the same period of 2018.
Much of that gain reflects UTC’s acquisition last year of Rockwell Collins, which it merged with UTC Aerospace Systems to form Collins Aerospace.
The Collins business generated revenue of $6.6 billion in the second quarter, up 66% from $4 billion in the second quarter of 2018.
Aftermarket sales increased 16% year-on-year in the second quarter, UTC says.
“The business continues to exceed our expectations,” UTC chief executive Gregory Hayes says of Collins during UTC’s second quarter earnings call on 23 July.
UTC has now tweaked its 2019 financial estimates for Collins, predicting the unit’s full-year adjusted operating profit will be up $1.7-1.75 billion year-on-year. That range is $150 million more than UTC previously anticipated.
The company’s aerospace business earned an operating profit of $2.6 billion in 2018, meaning Collins is on track to earn an adjusted operating profit of at least $4.3 billion this year.
“We see a $150 million improvement in the full-year operating profit outlook in Collins Aerospace,” UTC chief financial officer Akhil Johri says during the earnings call. “This is driven in equal parts by higher cost synergies, better legacy Rockwell Collins performance, primarily in the avionics business, and the strong aftermarket results we saw in the legacy aerospace business in the first half.”
Source: Cirium Dashboard