This summary is based on the first quarter fiscal 2008 earnings call conducted by United Technologies Corp. (UTX: chart) on April 17, 2008.

Management:

- VP, Accounting and Finance: Gregory J. Hayes
- Director of IR: Kenneth Parks
- VP, Finance: James E. Geisler

Key Investors Issues

- Revenues were up 12% to $13.7 billion from $12.3 billion in 2007.
- Income increased by 26% to $1 billion or $1.03 a share.
- The firm repurchased $801 million worth of shares.

First Quarter Highlights

Revenues were up 12% to $13.7 billion from $12.3 billion in 2007, including 7 points organic growth driven by the strong performance across the businesses.

- Earnings were $1 billion or $1.03 a share, up 26% from $819 million or 82 cents over last year on positive impacts from last year''s Otis EU and gains and restructuring of whole periods.
- FX generated a small benefit in the quarter with a positive impact from the year, partially offset by foreign exchange headwind on Pratt & Whitney''s Canadian operations. - All three of the commercial businesses saw a margin expansion in the quarter, with Otis and Fire & Security up 50 basis points and Carrier up 40 basis points as a result of continuing tight cost control and good execution across the businesses.
- Both Pratt & Whitney and Hamilton Sundstrand saw a strong top-line growth as they continue to ramp up production and get a record backlog.

Sikorsky, despite shipping only 30 helicopters improved profits 17% and margins 100 basis points.

- UTC invested about $30 million in restructuring, and anticipates additional restructuring actions throughout the remainder of the year.
- Investment in new products like Pratt & Whitney''s Geared Turbofan and Hamilton''s platforms on the 787 will continue to be a priority as these will fuel continued growth for years to come.
- Free cash flow came in at about 65% of net income, not unexpected given the normal seasonality in the Carrier as well as lower shipments from Sikorsky and the inventory build on the aero side.
- The firm repurchased $801 million of UTC shares and continue to expect repurchases to total about $2 billion for the year.

Macroeconomic Perspectives:

- There are some signs of botheration in order rates in a few of the shorter cycle businesses, but for the vast majority of UTC, the economic environment still looks very favorable.
- On the commercial aero side, there is continued growth on the OEM side of the business and backlogs remain very robust.
- The commercial aftermarket growth did slow a bit to about 6% in the quarter and high fuel prices are impacting the aero line.

However, the firm still expect RPMs to grow 3% to 4% this year on strengthened business travel and emerging markets.

- Emerging markets remain buoyant in spite of the slowdown in the US economy and foreign exchange also looks to be a tailwind for the year, although a weak dollar is not universally advantageous to all of the businesses.
- Commercial construction order growth while lower than last year remains solid, even in the US, where Otis saw order growth of nearly 20%, and Carriers commercial HVAC business saw order growth of 5%.
- US residential business continues to be challenged with housing starts now expected to be down nearly 35% in the already depressed levels of 2007 and there are also weaknesses in orders in the refrigeration business, both in the US and Europe.
- Fire & Security''s US residential business which sells through the major retail chains has also been negatively impacted and there has also been a slowdown in F&S''s European Electronic Security business, primarily in the UK.

Segment Highlights:

- Otis delivered another strong quarter with profit growth of 19% on revenue growth of 16%.
- Foreign exchange contributed approximately half of the growth and revenues increased in all geographic regions, led by double-digit growth in North America, China and Russia, reflecting robust new equipment backlog entering the year.
- Margins expanded 50 basis points, despite a continued shift in sales mix towards new equipment as the team continued to execute their strategic initiatives on product and other cost reductions, new logistics acceleration, and fuel performance on new equipment installations.
- New equipment orders were up 20% in the quarter, reflecting double-digit increases in all geographic regions.

- At Carrier, operating profit increased 15% year-over-year on 9% higher revenues and operating margins expanded 40 basis points in the quarter.
- Foreign exchange contributed about 6 points to the revenue growth and 9 points of the profit growth.
- The commercial HVAC business with double-digit revenue and earnings growth in all regions more than offset continued housing-related weakness in North America.
- Carrier has recently seen moderating growth in commercial HVAC orders and selling order rates in the refrigeration units particularly in the US.

- Fire & Security performance was solid, as revenue was up 28% and profits were up 38% with favorable foreign exchange contributing 8 points to the revenue and profit growth.
- Acquisitions contributed the remainder of the revenue growth.
- Revenue decline was 30% in the US residential business and low-single digits in the Electronic Security business in the UK entirely offset growth in the other regions and segments.
- Operating margin expanded 50 basis points year-over-year to 7.6% as benefits of prior restructuring actions, primarily from the Kidde factory rationalizations and cost containment initiatives were partially offset by the impact of global US residential volume and recent acquisition and integration costs.

- Pratt & Whitney revenues increased nearly $0.5 billion or 18% in the quarter, led by 30% growth at Pratt & Whitney, Canada, and power systems revenues that more than doubled.
- Military revenues were up 15%, on favorable mix as well as higher engine deliveries year-over-year.
- Operating profit improved 15% in the quarter, reflecting the higher revenues, partially offset by the unfavorable FX impact of the Canadian dollar, the entire year-over-year E&D supporting new program wins.
- The combined impact of these headwinds on operating margin was more than a 100 basis points in the quarter.

- Hamilton Sundstrand revenues were up 11% in the quarter with aerospace OEM, aftermarket and industrial all growing at double-digit rates.
- Operating profit grew 3%, and margins contracted in the quarter as a lower margin commercial volume accounted for substantially all of the aero OEM growth.
- In addition, Hamilton recorded incremental cost on fixed-price development programs in the quarter.
- The unit is currently accessing the risk due to the recent rescheduling of the 787 program; however, these changes clearly will put pressure on Hamilton''s full year operating profit growth guidance of a $100 million.