United Technologies Confirms it will Shed Sikorsky

With its strategic review complete, United Technologies Corp. announced on Monday that it will pursue the spinoff or sale of the Stratford-based Sikorsky Aircraft business, subject to final board approval.

A decision on whether Sikorsky will be spun off or sold is expected by the end of the third quarter.

“Our strategic review has confirmed that exiting the helicopter business is the best path forward for United Technologies,” UTC President and Chief Executive Officer Gregory Hayes said in a statement. “Sikorsky is the world’s premier helicopter company and through a series of strategic wins is well positioned for long-term growth. However, separation of Sikorsky from the portfolio will allow both United Technologies and Sikorsky to better focus on their core businesses. Over the coming weeks, we’ll determine whether a spinoff or direct sale is the best way to enhance Sikorsky’s long-term success and create the most value for customers and shareholders.”

• Also see: Sikorsky Aircraft Cutting 1,400 Jobs, Consolidating Facilities

Excluding Sikorsky, UTC now expects 2015 earnings per share of $6.35 to $6.55 on sales of approximately $58 to $59 billion.

The company continues to expect organic sales growth of 3 to 5 percent and cash flow from operations less capital expenditures in the range of 90 to 100 percent of net income attributable to common shareowners, according to the press release.

Including Sikorsky, the company now anticipates earnings per share of $6.55 to $6.85, down from the previous expectation of $6.85 to $7.05. This reduction in the earnings expectation range reflects approximately $0.10 to $0.20 of one-time separation costs along with a $0.10 decline in Sikorsky’s operational expectations for the year due to weakness in the oil and gas markets.

Despite Monday’s news, elected officials are pledging their support to Sikorsky.

U.S. Senator Chris Murphy (D-Conn.) said United Technologies decision to sell or spin off is “no surprise” and his focus “remains on ensuring that Sikorsky helicopters continue to be made in Connecticut no matter who owns the company.”

“I will remain in close contact with Sikorsky and UTC leadership as decisions are made over the next few months,” Murphy said in a statement. “And in Washington, I am committed to supporting robust federal funding that will protect and grow Connecticut’s defense manufacturing industry and the hundreds of thousands of jobs it supports across our state.”