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)

United Technologies Company Description

United Technologies is the second-largest player in the aerospace and defense industry, with a market capitalization of around $91 billion. UTC competes with companies in the commercial aerospace and the defense industry. Its major competitors include Johnson Controls Inc in the commercial aerospace segments, and Lockheed Martin and General Dynamics in the defense aerospace market. The stock is currently trading at a price to earnings multiple of 18.3. Its competitor, General Dynamics, is trading at a price 13.2 times its per-share earnings over the last twelve months. The S&P 500, meanwhile, is trading at an average price to earnings multiple of 15x. Read More: UTX

UTX Earnings Lack GE Oomph, a Set-Up for 3M

United Technologies Corp. (UTX) reported third-quarter results before markets opened Tuesday morning, and the results were just okay. Profit up 1.2%, earnings per share (EPS) better than the consensus estimate, while revenue missed estimates by about $1 billion.

The company lowered its full-year revenue by $1 billion, but did raise the low end of its guidance by $0.10 and is now projecting full-year EPS of $6.10 to $6.15. Since our review of the conglomerates last month, United Tech has posted a new 52-week high above $112, before falling below $107 again.

3M Corp. (MMM) reports earnings on Thursday and is expected to post EPS of $1.75 on revenues of $7.85 billion. Compared with a year ago, EPS is forecast down and revenues are forecast about $350 million higher. Like United Tech, since mid-September 3M has posted a new 52-week high above $123 a share, above the consensus price target of $122.60. Read more: United Technologies Corp. (UTX)

United Technologies Corporation : Carrier Contribution Supports Industry Research at Purdue University's New Ray W. Herrick Laboratories

In keeping with its commitment to innovation and environmental responsibility, Carrier is proud to be a part of Purdue University's newly expanded heating, ventilation, air conditioning (HVAC) and refrigeration research facilities at Ray W. Herrick Laboratories. The company's recent contribution of a custom air-handling system and five years of engineering expertise will support the university's research including that conducted in Herrick's new Willis Carrier Laboratory, which will be used to advance the energy efficiency of HVAC and refrigeration equipment. Carrier, the world's leader in high-technology heating, air-conditioning and refrigeration solutions, is a part of UTC Building & Industrial Systems, a unit of UnitedTechnologies Corp. (NYSE: UTX).

"As a company founded on innovation, we have a strong, natural desire to support the next generation of innovators," said John Mandyck, chief sustainability officer, UTC Building & Industrial Systems. "Willis Carrier was just 25 years old when he invented modern air conditioning. We know some of the best ideas come from bright, young minds so we are excited to see how Purdue's student researchers will positively impact our industry." Read more: UTX

United Technologies Research Center Wins R&D 100 Award for Breakthrough Energy Storage System

United Technologies Research Center (UTRC), the research and innovation arm of United Technologies Corp. (UTX), today announced that UTRC's PureStorage flow battery energy storage technology has been named by industry experts and the editors of R&D Magazine as a recipient of the publication's coveted R&D 100 Award. It is listed among the 100 most technologically significant products introduced during 2012.

The PureStorage system was selected for a 2013 R&D Award by virtue of its ability to provide safe, energy-efficient and readily deployable electric energy storage at 5-10 times the power density of conventional flow battery cells. Various companies in Japan, Germany and China are already beginning to sell conventional commercial flow battery units. The advanced technology recognized by this award could make flow battery systems even more attractive to utilities for a range of applications globally. Read more : United Technologies Corp. (UTX)

United Technologies Corp. Dividend Stock Analysis

Linked here is a detailed quantitative analysis of United Technologies Corp. (UTX). Below are some highlights from the above linked analysis:

Company Description: United Technologies Corp. is an aerospace-industrial conglomerate with a portfolio that includes Pratt & Whitney jet engines, Sikorsky helicopters, Otis elevators, and Carrier air conditioners, among other products. In July 2012, UTX purchased aerospace competitor Goodrich.
Fair Value: In calculating fair value, I consider the NPV MMA Differential Fair Value along with these four calculations of fair value, see page 2 of the linked PDF for a detailed description:

1. Avg. High Yield Price
2. 20-Year DCF Price
3. Avg. P/E Price
4. Graham Number

UTX is trading at a premium to all four valuations above. Since UTX's tangible book value is not meaningful, a Graham number can not be calculated. The stock is trading at a 101.8% premium to its calculated fair value of $51.67. UTX did not earn any Stars in this section.
Dividend Analytical Data: In this section there are three possible Stars and three key metrics, see page 2 of the linked PDF for a detailed description: Read More : United Technologies Corp. (UTX)

United Technologies Corporation Interesting February 2014

United Technologies Corp. (UTX), valued at $99.11B, started the session at $107.96.
Today, shares have traded between $107.49 and $108.29 per share with a trailing 52-week range being $74.44 to $112.46.

In a review of the consensus earnings estimate this quarter, 22 sell-side analysts are looking at $1.52 per share, which would be $0.48 better than the year-ago quarter and a $0.02 sequential decrease. The full-year EPS estimate is $6.15 which would be a $0.80 better than last year’s full-year earnings.
The quarterly earnings estimate is predicated on a consensus revenue forecast of $17.16 Billion. If reported, that would be a 4.38% increase over the year-ago quarter.

Recently, Oppenheimer downgraded UTX from Outperform to Perform (Sep 28, 2012). Previously, Argus upgraded UTX from Hold to Buy. The average price target for UTX shares by the analysts covering the stock is $118.29, which is 9.57% above where the stock opened this morning. Read more: United Technologies Corporation

Interesting February 2014 Stock Options for United Technologies

Consistently, one of the more popular stocks people enter into their stock options watchlist at stock trading United Technologies UTX +0.44% Corp. (NYSE: UTX). So this week we highlight one interesting put contract, and one interesting call contract, from the February 2014 expiration for UTX.

The put contract our YieldBoost algorithm identified as particularly interesting, is at the $100 strike, which has a bid at the time of this writing of $1.91. Collecting that bid as the premium represents a 1.9% return against the $100 commitment, or a 6.3% annualized rate of return (at Stock Options Channel we call this the YieldBoost).

Selling a put does not give an investor access to UTX’s upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. So unless United Technologies Corp. sees its shares fall 7.2% and the contract is exercised (resulting in a cost basis of $98.09 per share before broker commissions. Read more: UTX

United Technologies Powers Full Steam Ahead

The mid-September taperless news by the Fed had both positive and negative connotations. Investors took it to mean that either the U.S. economy is still too weak to be pulled off life support, or a grim indicator that Congress might end up bollixing things up. 

The continued strength of the U.S. ISM Manufacturing index, however, sends out strong signals that industrials are currently at the beginning of a period of elevated capital spending, as global companies look to spur reinvestment. Businesses are under pressure to replace or upgrade machinery that is a bit long in the tooth, after a long period of dormancy during the recession. Read more: United Technologies

Bombardier CSeries 2014 Debut at Risk as Test Flights Lag

Bombardier has said the CSeries, which features the new geared turbofan engine from United Technologies Corp. (UTX)’s Pratt & Whitney, will cost about 15 percent less to operate, cut fuel burn by about 20 percent and produce less noise.

Each flight allows Bombardier to collect data on about 14,000 parameters, and initial results suggest the plane will probably meet the company’s expectations on variables such as speed and altitude, Poutissou said.

Bombardier will probably need another four to six months to compile “concrete” performance data -- including fuel efficiency and noise performance -- on the aircraft, David Newman, an analyst at Cormark Securities in Toronto, said in a note published Oct. 22. Read More:  UTX.

 

United Tech Wins $205 Million in New Defense Contracts

The Department of Defense on Wednesday announced 13 new contracts that are worth $1.14 billion in aggregate. Honeywell International claimed roughly 44% of the funds on offer, but United Technologies (NYSE: UTX ) came in a not-too-distant second.

Sikorsky Support Services received an indefinite-delivery requirements contract worth $110.8 million to provide organizational, intermediate, and depot-level maintenance to support U.S. Navy T-34, T-44, and T-6 training aircraft built by Beechcraft. Sikorsky will also provide labor, equipment, and tooling needed to support the nearly 370 training aircraft covered under the contract through October 2014. Read more UTX.

United Technologies Profit Beats Estimates on Plane Components

United Technologies Corp. (UTX) reported third-quarter profit that beat analysts’ estimates, driven by sales of air conditioners and aircraft components.

Net income rose 1.2 percent to $1.43 billion, or $1.55 a share, from $1.42 billion, or $1.37, a year earlier, the Hartford, Connecticut-based company said today in a statement. Analysts projected $1.54, the average of 20 estimates compiled by Bloomberg.

United Technologies also boosted the lower end of its full-year earnings per share forecast today to a range of $6.10 to $6.15, up from $6 to $6.15, previously. Full-year sales will be about $63 billion, down from a prior projection of $64 billion.

The “weakness in military aerospace markets and slow pace of recovery in Europe” will damp annual revenue, Chief Executive Officer Louis Chenevert said today. read more about UTX.

Foreign Cash May Mean Foreign Deals At United Tech

When United Technologies Corp.'s UTX -0.26% acquisition appetite returns, the company may favor foreign targets as it seeks a way to use the cash it has sitting overseas, Chief Financial Officer Greg Hayes said.

Of the $4.9 billion in cash the industrial conglomerate held at the end of June, “most of that is sitting overseas — if not all,” Mr. Hayes said. “One of the benefits of foreign cash is it does give you the opportunity to make investments overseas and to do acquisitions overseas. So as you think of the M&A agenda, that is probably where to look next.”

It may be awhile before more big M&A deals materialize. The conglomerate is still digesting its $16.4 billion acquisition of Goodrich and won’t be coming to the table any time soon. “I wouldn’t look for anything big coming out of UTX for the next few years,” Mr. Hayes said on a conference call. Read more: United Technologies Corp

UTC Stock Analysis: Sell at 52-week High

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).

UTC has been restructuring its portfolio to achieve operational efficiencies. It has recently completed a number of acquisitions and divestitures to lower costs. Read More: United Technologies Corporation (UTC)

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. UTC has in fact been raising its annual dividends over the last 17 years. 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, UTC’s many segments are unsure about their future. Its trademark OTIS elevator brand and its Climate, Control and Fire segment currently have a large exposure to China as well as other emerging markets. A slowdown in those segments could considerably hurt its segment revenues. Read more: United Technologies Corporation (UTC) (Ticker: UTX)

Linde Names Buechele as CEO to Succeed Reitzle in 2014

Linde AG (LIN) said Wolfgang Buechele will become chief executive of the German industrial-gas supplier, taking the former private equity executive to a company where he was once one of its most important clients.

Buechele, 54, will start at Linde on May 1, replacing retiring Wolfgang Reitzle, the Munich-based company said. In the two years since leaving Linde customer Borsodchem Zrt of Hungary, the German national has built his reputation at Helsinki-based water-treatment chemical makerKemira Oyj.

Buechele, who held executive roles at Permira, Blackstone and BASF SE (BAS), is joining Linde as it battles Air Liquide SA (AI) for the top spot in the industry supplying gases such as oxygen to welders and hospitals. Reitzle, 64, turned Linde from an equipment company to a specialist in the field, trebling its share price in the decade he held the job.

“It is very hard to follow Reitzle,” said Stuttgart-based Landesbank Baden-Wuerttemberg analyst Ulle Worner, who recommends buying Linde shares. “He’s made them into a focused gas company, taken them away from being a diversified industrial player. They’re now a world leader.” Reitzle sold under-performing assets and acquired larger industrial gas company BOC Group Plc in 2006. Germany’s benchmark DAX index has less than doubled during his tenure. Read more: United Technologies Corp. (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)

Pentagon Awards $2.61 Billion in Contracts Tuesday

The Department of Defense announced $2.61 billion worth of contracts on Tuesday in 52 separate awards, setting yet another record for the year. Many of the day's biggest contracts went not to traditional "defense contractors" but rather to non-profit medical providers such as Johns Hopkins Medical Services and Saint Vincent's Catholic Medical Centers. But for-profit publicly traded companies got their fair share of the Pentagon's dollars as well.

• Communications specialist Harris Corp (NYSE: HRS) did especially well, winning a $140.7 million firm-fixed-price, non-option-eligible, non-multiyear contract for the production of Mid-Tier Networking Vehicular (MNVR) radios for the U.S. Army. Other contractors did not win contracts quite so lucrative.
• Britain's BAE Systems (NASDAQOTH: BAESY ) won an $8.6 million option exercise requiring it to provide a "full range" of ordnance handling and management services to the U.S. Navy in both "peacetime and wartime" through Sept. 30, 2014.
• Government contractor Booz Allen Hamilton (NYSE: BAH) won a $6.8 million cost-plus-fixed-fee contract to provide the Air Force, the Department of Defense, and the intelligence community with software required for the "study, analysis, engineering, design, development, modeling, simulation, integration, testing, demonstration and transition of cyber and multi-level capabilities." This contract runs through Sept. 23, 2016.
• Chicago Bridge & Iron (NYSE: CBI) subsidiary Shaw Environmental & Infrastructure was awarded a $6.7 million contract modification, increasing the maximum dollar value on a previously awarded task order to inspect and repair pipelines at the Defense Fuel Supply Point, Naval Base in Guam. This task should be completed by September 2014.
• Hamilton Sundstrand -- now the United Technologies (NYSE: UTX ) subsidiary known as UTC Aerospace Systems  -- was awarded a $6.6 million firm-fixed-price, non-option-eligible, non-multiyear contract to supply flight control computers for U.S. Army Black Hawk helicopters. Read More : United Technologies (NYSE: UTX  )

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