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ATR Eyes U.S. Market For Turboprops

French-Italian regional turboprop manufacturer expects a pickup in demand for propeller-driven planes in the U.S. as airlines look to fuel efficiency.

FARNBOROUGH, England (AP) -- French-Italian regional turboprop manufacturer ATR expects a pickup in demand for propeller-driven planes in the U.S. as airlines look to fuel efficiency.

Filippe Bagnato, CEO of the Toulouse-based company, told The Associated Press in an interview on Wednesday that he expects turboprops to replace jets on short haul routes like New York-Washington when U.S. airlines renew their aging fleets.

He forsees a revival of turboprops -- which typically consume at least a third less fuel than equivalent jets. He said the latest generation of turboprops have addressed some of the comfort and noise issues that had pushed airlines to favor jets.

Around 100 ATRs are currently flown by U.S. airlines.

He also said the company's cost-cutting drove operating margins to a "record high."

New equipment orders rose 12 percent at Otis, spare part orders climbed 8 percent at Pratt & Whitney and 7 percent at aerospace manufacturer Hamilton Sundstrand.

In addition, United Technologies said commercial heating, ventilating and air conditioning equipment orders rose 6 percent at Carrier. The segment's refrigerated transportation business jumped 39 percent.

It's the second consecutive strong quarter for Carrier, which went through restructuring and cost-cutting. It was among the first United Technologies businesses to feel the impact of the recession in 2007 when the housing market and residential orders fell sharply. Its refrigerated transportation container business plunged 80 percent in 2008.

United Technologies' aerospace businesses were hurt as the airline industry made deep cuts during the recession, but the company experienced improvement in that area in the period. Operating profit at Pratt & Whitney jumped nearly 12 percent and rose 9 percent at aerospace manufacturer Hamilton Sundstrand.

Otis elevator, which benefited from a construction boom in China, posted a 3.9 percent drop in revenue for the quarter, but operating profit was up less than 2 percent.

United Technologies raised its profit guidance for 2010, based on strong performance in the first half of the year. It now expects to earn between $4.60 per share and $4.70, up from a range of $4.50 per share to $4.65. The range includes a charge of 20 cents per share for restructuring and one-time items.

Chenevert said the company's cash generation remains strong. United Technologies said it will increase share repurchases this year to $2 billion, up from a prior expectation of $1.5 billion.