Samsung’s Next Big Project: A See-Through Smartphone

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United Technologies Beats Earnings But Misses on Top Line

United Technologies Corp. (UTX) beat consensus estimates for the fourth quarter (4Q) of fiscal year 2013 (FY13). It released its earnings report during pre-market hours and the stock price was up just 0.22% in pre-market trading.

The diversified conglomerate, with businesses ranging from aircraft manufacturing to elevators and escalators, reported earnings per share of $1.58, beating analysts’ estimates by $0.14. Full year earnings came in at $6.21 per share, reflecting an increase of 16% year-over-year (YoY). Revenues for the company during the fourth quarter amounted to $16.8 billion, an increase of 2% YoY, and were led mostly by inorganic growth.

The company’s elevator brand, Otis, is the largest in the world, and reported an increase in orders of 8% YoY. 

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United Technologies: The Future Looks Divided

United Technologies Corporation (UTC) (Ticker: UTX) is an industrial conglomerate with operations spread across military technology, escalator and elevator manufacturing, climate control, in addition to security services.

UTC has been providing investors with steady returns for more than 75 years, and the company is considered a “Dividend Achiever” for consistently raising dividends for over a decade – 17 years to be exact. We will look at the company’s ability to sustain its dividends as it faces uncertainties in the near future.

Even though the company is well diversified across multiple industries, some of UTC’s business units and subsidiaries are facing an uncertain future. The Otis Elevator Company and UTC Climate, Controls & Security, for example, currently have a large exposure to China as well as other emerging markets. A slowdown in those segments could considerably hurt UTC’s segment revenues.

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UTC Stock Analysis: Sell At 52-Week High

Company Profile:

United Technologies Corporation (UTC) (NYSE: UTX) is an industrial conglomerate that provides a broad range of high-technology products and services. Founded in 1975 and headquartered in Hartford, Connecticut, it operates through its five subsidiaries, namely Otis Elevator Company (OTIS), UTC Climate, Controls & Security (CC&S), Pratt & Whitney (P&W), Sikorsky and UTC Aerospace Systems (UTCAS).

Business Segments:

UTC has been restructuring its portfolio to achieve operational efficiencies. It has recently completed a number of acquisitions and divestitures to lower costs, increase margins, drive growth and facilitate integration between product lines.

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UTC Guides Lower Growth, Stock Price Slides

Company Chairman and CEO Louis R. Chenevert disappointed investors in United Technologies Corporation’s (UTX) annual investor and analyst meeting yesterday with the management’s tepid forecast for fiscal year 2014.

Chenevert said the company is preparing for slower growth in the global economy, particularly in China and other emerging markets in the Asia-Pacific region. UTC expects organic revenues to grow between 3-4% to $64 billion next year, and earnings to be around $6.55-6.85 per share. On the other hand, analysts had expected revenues of $66.3 billion, and $6.84 in per share earnings.

Chenevert said the management has allocated around $2 billion for dividends in 2014. The company has also provisioned $1 billion each for a share buyback program and potential acquisitions.

The company sees increased urbanization and growth in commercial aviation as growth drivers going forward. The management also plans on focusing on relentless cost-cutting and effective cash deployment to increase shareholder value in the company.

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United Technologies Industry Analysis

The aerospace and defense industry comprises companies that design and manufacture airplanes for commercial and military applications. While smaller companies specialize in either commercial or military airplanes, United Technologies’ portfolio has a 50:50 exposure to both commercial and military aircraft markets. Under its Commercials business segment, the company collaborates with major aircraft manufacturers like Boeing and EADS. Read More: UTX

United Technologies Sees Profit Growth Below Estimates

United Technologies Corp. (UTX) said profit and revenue next year will probably fall below analysts’ estimates as sluggish U.S. government sales and tax-law changes temper earnings growth. The shares fell.

Earnings per share will be $6.55 to $6.85, the company said yesterday at a meeting in New York. That compares with analysts’ estimates of $6.85. United Technologies said sales will climb 1.6 percent to about $64 billion. Analysts had projected $66.2 billion.

United Technologies’ initial forecast for 2014 showed the drag from waning demand for U.S. military jets and helicopters along with a slow European economic expansion. The company supplies the aerospace industry with Pratt & Whitney jet engines and makes products such as Otis elevators and Carrier air conditioners that are sensitive to the construction market.

“It’s clear to me we’ve had a softer recovery than what we expected this time last year,” Chief Executive Officer Louis Chenevert said at the meeting.

The guidance prompted Nick Heymann, a William Blair & Co. analyst in New York, to cut his rating on the stock to market perform and reduce his 12-month price target by 8.7 percent to $116, citing its outlook for sales growth of 3 percent to 4 percent next year excluding the effect of acquisitions.

“The most critical issue behind our decision to lower our rating was the notable reduction in expectations for organic revenue growth in 2014,” Heymann wrote in a note to clients today. Read More : United Technologies Corp. (UTX)