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United Technologies Reaffirms '16 View, Offers '17 Guidance
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Diversified industrial goods manufacturer United Technologies Corporation recently reiterated its earlier view for 2016. The company also provided an initial guidance for 2017 based on current business scenario and market expectations.
For 2016, the company continues to expect adjusted earnings in the range of $6.55–$6.60 per share on revenues of $57–$58 billion. This represents organic sales growth of 2–3% on a year-over-year basis.
The company reaffirmed its acquisition expectation of $1–$2 billion and free cash flow guidance in the range of 90–100%. It also plans to repurchase shares worth $3 billion in 2016. United Technologies stated that its plan to return $22 billion in cash to shareholders from 2015 through 2017 remains on track.
For 2017, the company anticipates adjusted earnings in the range of $6.30–$6.60 per share on revenues of $57.5–$59 billion, representing organic sales growth of 2–4% year over year. Despite a challenging macroeconomic environment and continued investments in the aerospace segment, the company expects to generate significant cash from operations to reward the shareholders with a risk-adjusted return.
At the same time, United Technologies remains confident of delivering organic sales growth at a CAGR of 5–8% from 2016 through 2020 and beyond, on solid execution of strategic priorities that set a strong foundation for profitable growth.
United Technologies outperformed the Zacks categorized Diversified Operations industry in the last 90 days with an average return of 9.2% compared with 7.2% for the latter. Earnings estimates for 2016 have increased during this time frame from $6.59 to $6.62 per share, signifying positive investor sentiments.
United Technologies serves various end markets such as aerospace, defense and commercial construction, which move according to their own cycles. This business mix and diversification allows the company to remain profitable even during tough economic times, delivering consistent earnings and dividend growth. In order to fuel its growth momentum, it further remains focused on four key priorities: flawless execution, innovation for growth, structural cost reduction and disciplined capital allocation. United Technologies is also seeking potential acquisition targets to achieve aggressive revenue targets and augment its market position.
Koninklijke KPN N.V. is currently trading at a forward P/E of 26.3x.
Hitachi has a long-term earnings growth expectation of 13% and has beaten estimates thrice in the trailing four quarters for an average positive earnings surprise of 103.5%.
Middleby has long-term earnings growth expectation of 22% and has beaten estimates in each of the trailing four quarters for an average positive earnings surprise of 15.9%.
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United Technologies Reaffirms '16 View, Offers '17 Guidance
Diversified industrial goods manufacturer United Technologies Corporation recently reiterated its earlier view for 2016. The company also provided an initial guidance for 2017 based on current business scenario and market expectations.
For 2016, the company continues to expect adjusted earnings in the range of $6.55–$6.60 per share on revenues of $57–$58 billion. This represents organic sales growth of 2–3% on a year-over-year basis.
The company reaffirmed its acquisition expectation of $1–$2 billion and free cash flow guidance in the range of 90–100%. It also plans to repurchase shares worth $3 billion in 2016. United Technologies stated that its plan to return $22 billion in cash to shareholders from 2015 through 2017 remains on track.
For 2017, the company anticipates adjusted earnings in the range of $6.30–$6.60 per share on revenues of $57.5–$59 billion, representing organic sales growth of 2–4% year over year. Despite a challenging macroeconomic environment and continued investments in the aerospace segment, the company expects to generate significant cash from operations to reward the shareholders with a risk-adjusted return.
At the same time, United Technologies remains confident of delivering organic sales growth at a CAGR of 5–8% from 2016 through 2020 and beyond, on solid execution of strategic priorities that set a strong foundation for profitable growth.
United Technologies outperformed the Zacks categorized Diversified Operations industry in the last 90 days with an average return of 9.2% compared with 7.2% for the latter. Earnings estimates for 2016 have increased during this time frame from $6.59 to $6.62 per share, signifying positive investor sentiments.
United Technologies serves various end markets such as aerospace, defense and commercial construction, which move according to their own cycles. This business mix and diversification allows the company to remain profitable even during tough economic times, delivering consistent earnings and dividend growth. In order to fuel its growth momentum, it further remains focused on four key priorities: flawless execution, innovation for growth, structural cost reduction and disciplined capital allocation. United Technologies is also seeking potential acquisition targets to achieve aggressive revenue targets and augment its market position.
United Technologies currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Koninklijke KPN N.V. (KKPNF - Free Report) , Hitachi, Ltd. (HTHIY - Free Report) and The Middleby Corporation (MIDD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Koninklijke KPN N.V. is currently trading at a forward P/E of 26.3x.
Hitachi has a long-term earnings growth expectation of 13% and has beaten estimates thrice in the trailing four quarters for an average positive earnings surprise of 103.5%.
Middleby has long-term earnings growth expectation of 22% and has beaten estimates in each of the trailing four quarters for an average positive earnings surprise of 15.9%.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>