United Technologies Corporation (NYSE:UTX) has revealed that it will move out of the aircraft venture by dropping its Sikorsky Aircraft business.
The company has been operating the Connecticut-based Sikorsky helicopter business under its umbrella for some time. United Technologies is based in Hartford, Connecticut. The company announced that it plans to focus on high technology services and systems that will be used in the aerospace and building industries.
Sikorsky, on the other hand, deals with Military helicopters as well as commercial helicopters, though its market base is more tilted towards the military customer base. The company is famous for making the popular Black Hawk helicopters. United Technologies has not revealed whether Sikorsky will be sold to another company. However, the parent company said that it would release further details towards the end of summer.
United Technologies Chief Executive Officer and President, Gregory Hayes, stated that the company’s strategic review revealed that the company’s current business strategy is best. This means that the firm’s original strategy is the best suited to push the company forward. Thus the need for the company to place more focus on it and let go of alternative undertakings.
According to Mr. Hayes, splitting United Technologies and Sikorsky will be advantageous or both their futures. That is because it will allow both firms to focus on their fundamental objectives. United Technologies Corporation (NYSE:UTX) anticipates earnings per share to average $6.35 to $6.55 in 205 without Sikorsky. The firm also expects the sales value to average $58 to $59 billion. When combined with Sikorsky, the expected to range from $6.55 to $6.85 or from $6.85 to $7.05.
The separation is expected to result in a decline of 10 cents per share for Sikorsky, especially as a result of the falling oil and gas prices. United Tech expects share prices to rise from 10 cents per share to 20 cents per share. Overall both firms are expected to perform better in the future as a result of more focus on their core business.