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United Technologies Corp (UTX - Analyst Report) reported fourth quarter 2013 earnings from continuing operations of $1.58 per share, up from $1.04 in the year-ago quarter. The reported earnings per share (EPS) beat the Zacks Consensus Estimate of $1.53.

Income from continuing operations for the quarter stood at $1.4 billion versus $945 million in the prior-year quarter. Recurring EPS for the quarter increased 29.0% year over year to $1.67 per share. The surge in earnings was driven by an increase in revenues.

For fiscal 2013, the company reported earnings from continuing operations of $6.21 per share, up from $5.35 in the prior year. For fiscal 2013, the reported earnings per share (EPS) beat the Zacks Consensus Estimate of $6.16.   Income from continuing operations increased 17% from the prior year to $5.7 billion.  
Total revenue for the fourth quarter edged up 2% year over year to $16.8 billion, but missed the Zacks Consensus Estimate of $17.0 billion. The increase in revenues was driven by organic growth.

Total revenue for fiscal 2013  rose 9% year over year to $62,626 million but missed the Zacks Consensus Estimate of $62, 927 million

New equipment orders at Otis were up 8% from the year-earlier quarter. UTC Climate, Controls & Security equipment orders increased 5% organically. Commercial spares orders increased 19% at UTC Aerospace Systems. However, large commercial engine spares orders were up 20% at Pratt & Whitney.

Segment Results

Otis reported revenues of $3,344 million in the fourth quarter, up 4.3% year over year. At the same time, revenues at UTC Climate Controls & Security increased 1.0% year over year to $4,192 million. Pratt & Whitney revenues increased 5.0% year over year to $4,089 million in the fourth quarter.

UTC Aerospace systems sales increased to $3,451 million from $3,174 million in the year-ago quarter. However, Sikorsky sales were down 13.0% year over year to $1,897 million in the fourth quarter.

Segment operating profit in the fourth quarter increased 33.0% year over year to $2,330 million.

Balance Sheet and Cash Flow

The company continues to maintain a strong cash flow position. As of Dec 31, 2013, cash and cash equivalents were $4.6 billion with long-term debt of $19.7 billion. The company had a debt-to-capital ratio of 38.0%. Cash flow from operations was $7.5 billion, while capital expenditures were $1,688 million as of Dec 31, 2013. The Company repurchased shares worth $1.2 billion and acquisition spending stood at $151 million in 2013.

Sales in 2014 are expected to be $64 billion. The company expects EPS in the range of $6.55–$6.85 per share. UTC expects to invest nearly $2 billion in capital expenditures in 2014. The company also expects share repurchase and acquisition spending of $1 billion each in 2014. The market reacted positively as share price increased in pre-market trading with a healthy beat in earnings.

With sustained order growth momentum in majority of its markets, the company expects organic growth to continue to accelerate in 2014 and beyond.

United Technologies currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look are Carlisle Companies Inc. (CSL - Snapshot Report), Crane Co. (CR - Snapshot Report) and Icahn Enterprises, L.P. (IEP), each having a Zacks Rank #2 (Buy).

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