United Technologies reported full year 2014 earnings per share of $6.82 and net income attributable to common shareowners of $6.2 billion, up 10% and 9%, respectively over the prior year. Sales of $65.1 billion were 4% above prior year including 4 points of organic growth. Segment operating margin was 15.2%, 10 basis points lower than prior year. Adjusted for restructuring and one-time items, segment operating margin was 16.6%. Cash flow from operations of $7.3 billion, less capital expenditures of $1.7 billion, was 90% of net income attributable to common shareowners.
"UTC delivered double digit earnings growth in 2014 despite a slower than expected global economy," said Gregory Hayes, UTC President & Chief Executive Officer. "Strong conversion on solid topline growth, continued cost reductions and benefits from lower pension expense drove the double digit earnings increase for the year. We delivered 90 basis points of margin expansion even as we continued to invest for the future."
Earnings per share for the fourth quarter of $1.62 included $0.09 of restructuring costs and $0.17 of net unfavorable one-time items. The prior year quarter included $0.11 of restructuring costs and $0.02 of favorable one-time items. Adjusted for restructuring and net one-time items in both years, earnings per share grew 13%, with segment operating margins of 16.5%. Sales of $17.0 billion increased 1%, reflecting the benefit of organic growth (4 points) partially offset by unfavorable foreign exchange (3 points).
Commercial aftermarket sales were down 6% at Pratt & Whitney on a tough compare, and up 5% at UTC Aerospace Systems.
"We saw good organic growth throughout the year," added Hayes. "Based on solid backlog and continued orders strength, we see topline momentum as we enter 2015; our business fundamentals and operational expectations have not changed. However, with the continuing strengthening of the US dollar, as well as additional pension discount rate headwind, we now expect 2015 EPS of $6.85 to $7.05, on sales of $65 to $66 billion."
UTC expects to invest $1.7 billion in capital expenditures in 2015, and continues to estimate cash flow from operations less capital expenditures in the range of 90 to 100 percent of net income attributable to common shareowners. The company now expects share repurchase of $3 billion and acquisitions of approximately $1 billion in 2015, following $1.5 billion and $530 million, respectively, in 2014.