|United Tech CEO mulls fire, security acquisitions|
United Tech CEO eyes possible acquisitions for fire and security, aerospace businesses
On Wednesday September 1, 2010, 10:56 am
HARTFORD, Conn. (AP) -- The chief executive of United Technologies Corp. gave an upbeat view of the conglomerate's businesses Wednesday and said he sees possible acquisitions for its fire and security business and possibly its aerospace units.
CEO Louis Chenevert, who took the top job in 2008, also said he expects to head the parent company of jet engine maker Pratt & Whitney, Otis elevator and other businesses for more than 10 years.
At an investor analyst conference, Chenevert said he sees "room for a couple of plays" in United Technologies' fire and security business. The business has been growing steadily, posting an operating profit of $168 million in the second quarter, triple the $55 million earned in the prior-year quarter.
In October 2008, United Technologies dropped its unsolicited $2.6 billion bid to buy ATM manufacturer Diebold Inc., which it intended to add to its fire and security business. Diebold thwarted UTC by refusing to discuss the offer and it delayed its financial information.
Chenevert also told analysts he sees a "possibility of a few" mergers and acquisitions in United Technologies' aerospace businesses, which includes Pratt & Whitney, Sikorsky Aircraft and Hamilton Sundstrand, a manufacturer of airline avionics and other components.
He also criticized a patent infringement lawsuit by Rolls Royce as "absolutely without merit."
"If I were in their shoes I think I'd focus on more engineers and less lawyers," Chenevert said. "That's how you win in the market."
Rolls Royce said last week it filed a lawsuit in U.S. District Court for the Eastern District of Virginia, alleging that fan blades in a United Technologies geared turbofan engine infringes on a Rolls-Royce patent. The British Rolls-Royce also claims that other United Technologies engines violate its patent.
Pratt & Whitney had said its engines do not infringe the Rolls Royce patent and that the Rolls Royce patent is invalid and unenforceable.
Chenevert also praised Ari Bousbib, who quit as executive vice president and president of United Technologies' commercial companies to take the CEO's job at health care data company IMS Health, for helping him in his transition as CEO.
"It's clear I'm well established. I'm going to stay around for a decade plus," Chenevert said.
He reiterated the company's estimate of earnings per share of between $4.60 and $4.70 for 2010, up by 12 to 14 percent this year from 2009, and revenue increasing by 2 percent, to $54 billion.
Shares rose $1.91, or about 3 percent, to $67.12 in morning trading as the broader markets rallied on strong manufacturing data.