United Technologies Is Set To Exit The Helicopter Business

Sikorsky to be sold or spunoff in the times to come.

United Technologies Corp. just completed its strategic review and finally announced that it will go with its plan to sale/spinoff its Sikorsky Aircraft business. This decision is subject to the final approval by the board of directors. At this point, it is still uncertain that the company will be sold or spinoff but that will be finalized by the end of third quarter of the fiscal year of 2015.

Mr. Gregory Hayes, the President and Chief Executive Officer of the company, states, “Our strategic review has confirmed that exiting the helicopter business is the best path forward for United Technologies.” The company is a relatively big name in the helicopter business and since it has several strategic victories, it boasts of growth prospects in long term. 

The reason why United Technologies needs to be separated from Sikorsky is that both organizations can then look after their core business in a more appropriate manner. The corporate giant will decide whether a direct sale or spinoff will be beneficial for them in the weeks to come. This decision will be taken while considering the growth of the aircraft business in future, along with the benefit of stakeholders and clients.

At this point, United Technologies expects an increase of 3-5 percent in the organic sales along with cash flow encompassing operation that exclude those capital expenses, which fall in the range of 90 to 100 percent of the income that will be attributable to stakeholders, reports the press release.

Inclusive of Sikorsky, the company now expects the earnings per share to be down from the estimations made earlier $6.85 to $7.05, but it is now compounding to $6.55 to $6.85. The decrease in the earnings is approximately $0.10 to $0.20 of the separations cost that will incur on one time basis. The depression has been observed because a weakness can be seen in the oil and gas industry. However, the new officials are supporting the aircraft subsidiary at this point.

Chris Murphy, the Senator of United States, believes that the decision to spinoff or sell Sikorsky comes as no surprise to him. His only concern at this point is that the helicopters continue to be manufactured in Connecticut irrespective of who owns the firm.

Mr. Murphy is concerned about this deal and vowed to remain in contact with Sikorsky and UTC officials over the coming months. He concludes by saying,  “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.”