Tag Archives: utx

United Technologies: Bottom Line Improvement Continues [Seeking Alpha]

United Technologies Corporation (UTX) is a diversified conglomerate, providing high technology products and services to the building systems and aerospace industries worldwide. Despite the mixed earnings results, UTX continues to hold strong cash position while focusing on integration to boost profitability.

Mixed Results

For Q1, 2013, revenue increased to $14.4B, which is below analysts’ estimate of $14.9B. However, net income of $1.39 per share is well above the estimate of $1.29 per share. The management also reaffirmed a forecast for full-year profit of $5.86-$6.15 per share on $64B-$65B of sales.

Declining Organic Sales due to Tough Market Conditions

The acquisition of Goodrich and IAE had provided $0.21 of earnings for Q1; however, organic sales declined 2%. However, North America and emerging markets continue to recover while Europe continues to be a headwind. On the positive side, UTX’s portfolio is well positioned for a resumption of top-line growth as the year progresses on.

Integration, Growth, and CapEx

Climate, Controls and Securities continued to realize savings from the integration (profit increased 8% while organic sales declined 3%). Otis, on the other hand, is gaining momentum with two consecutive quarters of sales growth. The CapEx for the quarter was $295M, which was up 60% comparing to the same quarter last year, as the company prepares for the ramp in commercial aerospace.

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3 Conglomerates On The Long-Term Uptrend [Seeking Alpha]

While the S&P 500 had gained 11.44% year to date, leading conglomerates stocks had been outperforming the market, including General Electric Company (GE) with 13.10% increase, United Technologies Corporation (UTX) with 15.96% advance, and Textron Inc. (TXT) with 20.10% surge as seen from the chart below.

(click to enlarge)

Source: Google Finance

General Electric Company

General Electric Company (GE), with a market cap of $240.41B, is a diversified technology and financial services company and a leader in all markets in which it competes.

GE’s latest M&A move was to acquire Lufkin Industries Inc. (LUFK), which is a move to take advantage of an oil-drilling boom, as reported by Bloomberg. It is a move for GE to buy the synergies and growth, as said by an analyst at William Blair & Co. GE continues to expand into the industrial end and shrink GE Capital, where the last reported ENI balance had been reduced to $419B in Q4, 2012 as compared to $461B in Q1, 2011. GE also took a notable step to divest its 49 percent stake in NBC Universal on February 12, thus to better focus on the industrial market as well as return more capital to shareholders while retaining more cash for future M&A.

Analysts currently have a mean target price of $25.60 for GE, suggesting 10.73% upside potential. Analysts, on average, are estimating an EPS of $0.35 with revenue of $34.70B for the current quarter ending in March, 2013. GE is expected to report its Q1, 2013 earnings on April 19, 2013. In the last four quarters, GE had three positive surprises and one in-line result.

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United Technologies And Siemens: Growing Cash Cows, Upgraded [Seeking Alpha]

United Technologies Corporation (UTX) and Siemens AG (SI) are two industrial companies with steady revenue growth, strong cash flow, and lower-than-industry average P/Es and Forward P/Es. Both stocks had received positive upgrades from analysts recently and will be analyzed fundamentally and technically in this article. Investing strategies will also be presented.

United Technologies Corporation

UTX was down 0.55% and closed at $92.77 on March 18, 2013. UTX had been trading in the range of $70.71-$93.58 in the past 52 weeks. UTX has a market cap of $85.04B and a beta of 1.06.

On March 18, 2013, Citi upgraded UTX from neutral to buy. FBR Capital reiterated a market perform rating and increased the target price from $88 to $95 for UTX on the same day. Analysts currently have a mean target price of $98.22 and a median target price of $100.00 for UTX, suggesting 5.87%-7.79% upside potential. Analysts are estimating an EPS of $1.29 with revenue of $14.97B for the current ending in March, 2013. For 2013, analysts are projecting an EPS of $6.09 with revenue of $65.15B, which is 12.90% higher than 2012.

UTX has a strong buyback plan of $5.4B, where the company will repurchase as many as 60 million shares for a total of about $1 billion for 2013, which is in-line with the previous projection. UTX is set to benefit from the improving economics in China and UTX expects Asian sales to increase about 7-8 percent in the next decade as construction of skyscrapers in China boosts demand for elevators and air conditioners.

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United Technologies: Strong Buyback With Improving Economics [Seeking Alpha]

United Technologies Corporation (UTX) is a diversified conglomerate, providing high technology products and services to the building systems and aerospace industries worldwide. On February 4, 2013, UTX closed at $89.54 and had gained 5.37% since our last article of “This Is The Right Momentum For United Technologies As Refocusing Continues.” More positive developments will be covered for UTX in this article and the current options strategy will be reviewed.

Recent Highlights

Q4 earnings: UTX’s Q4 profit jumped 55% as it benefited from gains on the sale of its legacy Hamilton Sundstrand’s Industrial businesses, though costs rose sharply. UTX reported a profit of $2.06 billion, or $2.26 a share, up from $1.33 billion, or $1.47 a share a year ago. The latest quarter included about $1.05 billion, net of tax, in gains on the sale of the Hamilton Sundstrand businesses. UTX’s earnings from continuing operations fell to $1.04 from $1.42 a share. Revenue was up 14% to $16.44 billion. Analysts surveyed by Thomson Reuters recently expected a per-share profit from continuing operations of $1.03 on revenue of $16.63 billion.

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This Is The Right Momentum For United Technologies As Refocusing Continues [Seeking Alpha]

United Technologies Corporation (UTX) is a diversified conglomerate, providing high technology products and services to the building systems and aerospace industries worldwide. UTX operates in six segments: Otis, Carrier, UTC Fire & Security, Pratt & Whitney, Hamilton Sundstrand and Sikorsky. With the reshaped, refocused portfolio through divesting and cost reduction, UTX anticipates organic sales growth in all of its businesses despite softness in Europe and declining U.S. defense spending.

Latest Highlights

As reported by Bloomberg on January 5, 2013, UTX’s Sikorsky helicopter unit is in position to win a U.S. Air Force contract valued at as much as $6.8 billion for 112 rescue helicopters after competitors failed to bid.

On December 13, 2012, UTX’s Chairman & CEO Louis Chênevert stated:

“In 2013, UTC’s reshaped portfolio will be well positioned for accelerated top line growth. We anticipate organic sales growth at each of our five businesses, even with continued softness in Europe and a decline in U.S. defense spending. We expect sales growth, our relentless focus on cost reduction and productivity, and the incremental benefits from our portfolio transformation to drive 10 to 16 percent earnings per share growth in 2013, despite significant pension headwinds.”

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