Revenue at Collins Aerospace jumped 64% in the third quarter, primarily due to acquisitions, prompting parent company United Technologies (UTC) to once again raise its 2019 full-year financial estimates for the business unit ahead of a planned corporate merger with Raytheon.
Collins Aerospace generated revenue of $6.5 billion in the third quarter, up from $4 billion in the same period of 2018, UTC says. The company attributes the rise to increases in commercial aftermarket and military sales. For the full year, UTC now expects Collins’ revenue to increase about 55% in total, with organic sales up “up mid-high single” digits.
Commercial aftermarket sales increased 17% year-on-year in the third quarter, UTC says.
The business earned $1.2 billion operating profit in the third quarter, up 91% from $610 million during the same period in 2018. Much of that gain reflects UTC's acquisition last year of Rockwell Collins, which it merged with UTC Aerospace Systems to form Collins Aerospace.
UTC has also tweaked its 2019 financial estimates for Collins, predicting the unit's full-year adjusted operating profit will be up $1.85-1.87 billion year-on-year, higher than previously estimated.
Gregory Hayes, UTC chief executive, says that the company has been successful in finding technology and revenue synergies across the business, leading to the higher earnings numbers.
In early October, shareholders of UTC and defence contractor Raytheon approved the companies' planned merger, putting the deal on track to close in the first half of 2020.
The agreement, still subject to regulatory approvals, calls for unification of Raytheon and UTC's aerospace companies, Pratt & Whitney and Collins Aerospace.
The combined company would be called Raytheon Technologies and have some $74 billion in annual revenue. As part of the deal, UTC intends to divest non-aerospace businesses Otis and Carrier.
