UTX
#Thanks, <UNK>
I'm on slide 4. I'll be speaking to the segments at constant currency as we usually do
And as a reminder, there's an appendix on slide 12 with additional segment data you can use as a reference
Otis sales were $3.2 billion in the quarter, and that was up 2% organically
Operating profit was down 7% at constant currency
Contribution from higher volume and productivity was more than offset by continued pricing and mix pressure, predominantly in China as well as strategic investments in service and E&D
Foreign exchange translation was a 1 point tailwind to sales and earnings
New equipment sales were up 2%
Low-double digit growth in Europe and high-single digit growth in North America were largely offset by a 10% decline in China, where the market and environment remains challenging
Service sales were up 5%, including the benefit of acquisitions
Otis saw solid growth in modernization and repair, while maintenance sales were up low-single digits
New equipment orders were down 4% in the quarter
25% growth in Europe was more than offset by a decline of 24% in North America, which had a tough compare, as well as declines in Asia excluding China
In China, orders were flat in dollar terms, with unit orders up 8%
Full-year expectations for Otis remain unchanged
We continue to expect operating profit to be down $125 million to $175 million at actual FX
Climate, Controls & Security grew sales 6% in the quarter
Operating profit grew 5%
FX translation was a 2 point tailwind to sales and a 1 point tailwind to earnings
CCS grew 4% organically in Q3, with growth in every major product segment
Commercial refrigeration was up 11% and transport refrigeration grew 8%
Residential HVAC was up mid-single digits, despite lower cooling degree days in the quarter
Global commercial HVAC was up 4%, with strength in the Americas and Europe more than offsetting weakness in Asia and the Middle East
Total equipment orders at CCS were up 2% in the quarter, primarily driven by 7% growth in global commercial HVAC
This is the first quarter of orders growth in the Middle East since Q3 of 2015. Commercial refrigeration orders grew high-single digits, offsetting a 10% decline in transport refrigeration
Residential HVAC orders were down 3% after seeing double-digit growth in the first half of the year
Global fire and security orders were up 2%
Organic volume contribution in the quarter was mostly offset by price and mix headwind
Productivity gains from restructuring and product cost reduction delivered 4% profit growth at constant currency
For the full year, we remain confident that CCS will deliver low to mid-single digit organic sales growth and that operating profit growth will be at the low end of the $100 million to $150 million range at actual FX
Turning to Aerospace on slide 6. Pratt & Whitney sales were strong, up 15% organically in the quarter
Total commercial OEM sales were up 31% and that was primarily due to higher Geared Turbofan deliveries and favorable mix on legacy programs
Pratt & Whitney Canada OEM shipments were down
Commercial aftermarket sales were up 11% on continuing V2500 strength
Sales at the military engines business were up 14%, benefiting from higher F135 and tanker deliveries, aftermarket strength and development revenues
Pratt & Whitney operating profit of $423 million was up 2%
Drop-through from the commercial aftermarket and higher military sales, as well as favorable FX and pension, was mostly offset by higher negative engine margin and ramp-related costs as well as the impact of lower Pratt & Whitney Canada shipments and a customer insolvency reserve
As <UNK> mentioned, Pratt has increased the allocation of GTF production to the spare engine pool, which reduces total negative engine margin
This, along with the higher commercial aftermarket volume, leads us to expect full-year operating profit to be down $125 million to $175 million, but likely closer to the $125 million end of the range
And that's an improvement over prior expectations
So, before I move onto Aerospace Systems, just a note; the shift toward spare engines will also negatively impact corporate eliminations as UTAS inter-company profit on GTF completions is eliminated at the corporate level
Turning to slide 7. Aerospace Systems delivered 4% profit growth on flat organic sales
Commercial OEM sales were down 6%, driven by declines in legacy program volume that more than offset growth on new programs in the quarter
Of note, the end of the Boeing 777 landing gear production at Aerospace Systems impacted commercial OEM sales in the quarter by approximately 4 points
Commercial aftermarket was up 11% and was driven by nearly 30% growth in provisioning
Parts were up 2% while repair was up 8%
Military sales were down slightly in the quarter
Operating profit growth was driven by drop-through on higher commercial aftermarket sales, continued cost reduction and pension tailwind
These benefits were partially offset by unfavorable OEM volume and mix
A favorable customer settlement in the quarter offset the absence of a prior year gain from the sale of a non-core asset
With solid year-to-date results at Aerospace Systems, we continue to expect operating profit to be up $50 million to $100 million for the full year and likely toward the high end of the range on low single digit organic sales growth
And with that, I will hand it back to Greg
<UNK>, it's a product of both higher volumes and shop visits on the V2500, really good content there as well
The 4s and the 2s, the legacy models, they continue to be in attrition mode and the shop visits were down as we expected, but we saw a bit higher content on our legacy models than we had expected
Some higher life-limited part replacement by some operators that's driving that strength
And as we talked about earlier in the call, some of those going to pull through
