United Technologies Corp. announced Monday it’s shedding helicopter maker Sikorsky Aircraft as it focuses on high-technology products for the aerospace and building industries.
The Hartford-based United Technologies said several months ago it was launching a strategic review of options for the future of Sikorsky, which it said was no longer a good fit in its portfolio. The decision ends an 86-year relationship that began with the purchase of Sikorsky by United Technologies’ predecessor, United Aircraft and Transportation Corp.
It will decide by the end of the third quarter whether it will sell or spin off the Stratford, Connecticut-based Sikorsky.
“Our strategic review has confirmed that exiting the helicopter business is the best path forward for United Technologies,” said Gregory Hayes, president and chief executive of United Technologies.
Sikorsky is the world’s “premier helicopter company” and is well positioned for long-term growth, he said.
“However, separation of Sikorsky from the portfolio will allow both United Technologies and Sikorsky to better focus on their core businesses,” Hayes said.
United Technologies has previously said Sikorsky didn’t fit with plans for long-term growth. Both its military and commercial helicopter businesses have been under pressure as the U.S. reduces its presence in Afghanistan and Iraq, and falling oil prices have cut oil production and exploration and the need to shuttle workers by helicopter to offshore platforms.
Excluding Sikorsky, United Technologies expects 2015 earnings per share of $6.35 to $6.55 on sales of $58 billion to $59 billion. With Sikorsky, earnings per share are expected to be $6.55 to $6.85, down from a previously stated $6.85 to $7.05.
United Technologies expects 10 cents to 20 cents per share of separation costs and a 10-cent per share decline in Sikorsky operations due to oil and gas market weakness.
Sikorsky has been a marquee company for United Technologies. It’s the manufacturer of the Black Hawk helicopter, a household name and military work horse, and presidential helicopters. Sikorsky helicopters also have played a role in returning astronauts home after they splashed down in the Pacific Ocean at the end of their space travels.
SOURCE: STEPHEN SINGER, AP