By Scott Malone
NEW YORK (Reuters) - Diversified U.S. manufacturer United Technologies Corp
The world's largest maker of elevators and air conditioners is planning for continued weakness in world construction markets. The continued recovery of the dollar against the euro also will hurt its results.
"We expect the global recession to continue through most of '09," Louis Chenevert, chief executive officer, told investors in New York. "What's remarkable in this environment is the speed at which we have seen the decline of the global economy. This is something that none of us have seen before."
United Tech said it expects to report profit of $4.65 to $5.15 per share in 2009. It expects 2008 profit to be $4.90 per share, at the low end of its prior forecast.
Analysts, on average, had expected 2009 profit of $5.04 per share, up from a forecast $4.93 per share this year, according to Reuters Estimates.
"We've got a lot more headwinds as we go forward from the strong dollar," said Chenevert. "(Foreign exchange) basically winds up almost washing away the operating profit growth."
The 2009 forecast calls for revenue of about $57 billion, which would mark a decline from the $59 billion it expects to report this year.
"They are positioned to weather the storm better than many peers," said Matt Collins, capital goods analyst at Edward Jones in St. Louis. "Only a handful of companies are going to be able to grow in 2009."
The Hartford, Connecticut-based company expects revenue at its aerospace unit -- which makes jet engines and helicopters -- to grow about 8 percent next year, with its commercial businesses, including Otis elevators and Carrier air conditioners down 2 percent. Both those forecasts presume constant exchange rates.
The forecast presumes that world gross domestic product grows at 1 percent next year, with North American GDP down 0.9 percent.
"We assume a very difficult first half of '09," Chenevert told reporters after the investor meeting. "We do assume in this plan that there will be some form of recovery in the second half."
'AGGRESSIVE COST CUTTING'
United Tech said it expects to spend $2 billion next year on share repurchases with another $2 billion budgeted for acquisitions. Those targets are in line with the goals the company had set for the past few years.
Chenevert said the company was on track for $350 million in restructuring charges this year as it eliminated some 5,500 jobs. United Tech's initial 2009 forecast for restructuring charges is $150 million, but could grow if business conditions deteriorate in the next few months he said.
The company employs roughly 220,000 people.
U.S. companies including Dow Chemical
A slew of U.S. industrial heavyweights have begun providing their financial outlooks for next year this week. On Monday, 3M Co
General Electric Co
United Tech's competitors include Eurocopter
So far this year, United Tech shares are down about 38 percent, a steeper drop than the 35 percent slide of the Dow Jones industrial average <.DJI> but modestly milder than the Standard & Poor's 500's <.SPX> 40 percent fall.
(Reporting by Scott Malone; Editing by Bernard Orr and Carol Bishopric)
