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United Technologies (UTX - Free Analyst Report), one of the Dow’s most diversified companies, reported solid second-quarter results, while simultaneously raising its full-year earnings guidance. Although cost controls did boost the bottom line, revenues increased, sending a loud signal to investors that demand is improving.

United Tech has reported second-quarter share earnings of $1.20. This tally compared favorably with the prior-year's $1.05 tally and our forecast of $1.17. Concurrently, management raised and narrowed its range of share-net guidance slightly, from $4.50-$4.65 to $4.60-$4.70.

Year-over-year top-line growth resumed in the June period, following six consecutive quarterly declines. In fact, revenues climbed across four of the company's six operating segments, supporting an overall increase of 5%. And thanks to cost reductions, the operating margin expanded to a record level.

On a segment basis, the Otis elevator business' profits rose only modestly year over year. Otis experienced lackluster demand in the U.S. and Europe, with the effect largely offset by strength in China. Still, a profit upturn is ensuing sooner than we had anticipated at the commercial jet engine operation Pratt & Whitney. That unit posted a more-than-10% spike in operating profits on rebounding sales. Furthermore, the HVAC subsidiary Carrier reported a nearly 30% income increase. The impact of expense containment was most visible in Carrier, as well as the Fire & Security arm, where results also benefited from the March acquisition of GE Security. Finally, income also advanced in the Hamilton Sundstrand (aerospace and industrial products) and Sikorsky (helicopters) divisions.

In light of United Tech’s healthy revenue prospects and improved cost structure, we have boosted our 2010 share-net estimate, which now stands near the top end of the company’s guidance range.

About The Company: United Technologies is a diversified industrial manufacturer that operates in six business segments. Pratt & Whitney (24% of ’09 revenues, 26% of operating profits) makes & services aircraft engines. Otis (22%, 35%) manufactures, and services, elevators. Carrier (21%, 11%) makes heating, ventilating, and air-conditioning equipment. Sikorsky (12%, 9%) makes helicopters. Hamilton Sundstrand (11%, 12%) produces aerospace and industrial products. UTC F&S (10%, 7%) provides security and fire protection services. The company also has a power division dealing in fuel cells.