Market Commentary and Intraday News
S&P raises outlook on United Technologies
325 days ago
(AP:NEW YORK) Standard & Poor's Ratings Services said Friday it raised its outlook on United Technologies Corp. to "Stable" after the defense contractor announced plans to reduce debt by selling some of its businesses.
S&P, which had put a "Negative" outlook on the company's debt, made no change in its ratings including the "A" corporate grade.
The change in outlook means it's less likely that S&P will downgrade United Technologies after the company agreed to sell three units of its Hamilton Sundstrand subsidiary and its Rocketdyne division for about $4 billion in separate deals. S&P said it expected the company to use proceeds from the sales to reduce debt.
S&P said debt reduction and cost controls would help the Hartford, Conn., company offset slower revenue and profit growth caused by the sluggish global economy.
On Thursday, United Technologies reported that net income in the second quarter was $1.33 billion, up just 1 percent from the same period last year. Revenue fell 5 percent to $13.81 billion.
United Technologies closed its $18.4 billion purchase of Goodrich Corp. this week. The company will have to sell Goodrich's businesses in electric power systems and engine controls and its share of a joint venture with Rolls Royce _ the price of winning approval from antitrust regulators.
Shares of United Technologies rose $1.35 to close at $74.28.
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