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United Technologies (UTX) Q4 Earnings Match, Affirms View
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United Technologies Corporation reported fourth-quarter 2016 adjusted earnings (from continuing operations) of $1.56 per share, in line with the Zacks Consensus Estimate.
GAAP earnings (from continuing operations) were $1.26 per share as against a loss of 30 cents in the year-ago quarter.
The company’s bottom line benefited from organic sales growth, driven by robust performance of the company’s Climate, Controls & Security businesses.
Adjusted net sales for the fourth quarter were $14,659 million compared with $14,652 million in the year-earlier quarter. Revenues beat the Zacks Consensus Estimate of $14,620 million. The rise was primarily attributable to improved performance in majority of its segments, except Otis and Aerospace.
For full-year 2016, the company reported adjusted earnings (from continuing operations) of $6.61 per share compared with prior-year earnings of $6.30. Adjusted revenues for 2016 were $57,428 million compared with $56,450 million in the prior year. The improvement in revenues was primarily attributed to the company’s Pratt & Whitney and Aerospace segment.
Segmental Results
Despite persistent volatility in foreign currency, revenues from most of the company's segments during the reported quarter were higher than the prior-year period.
Adjusted revenues at UTC Climate Controls & Security were $4,249 million, up 3.1% from $4,122 million in the year-ago quarter. Pratt & Whitney’s revenues increased to $3,992 million from $3,981million in the year-ago quarter. However, UTC Aerospace Systems’ sales were down 1.9% to $3,598 million from $3,667 million in the fourth quarter. Otis’ revenues were $3,063 million compared with $3,094 million in the prior-year quarter.
Adjusted operating profit at UTC Climate Controls & Security increased year over year to $680 million from $659 million in the year-ago quarter. Pratt & Whitney’s operating profit decreased to $470 million from $551 million in the year-earlier period, while UTC Aerospace Systems’ operating profit improved 4.4% year over year to $595 million. Operating profit at Otis declined to $534 million in the reported quarter from $561 million in the prior-year quarter.
United Technologies’ adjusted consolidated operating profit in the reported quarter was $2,160 million, up from $2,155 million in the prior-year period. Operating profit margin came in at 15.3% in the quarter, down from 15.7% in the year-earlier period.
United Technologies Corporation Price, Consensus and EPS Surprise
As of Dec 31, 2016, cash and cash equivalents were $7,157 million compared with $7,075 million in the year ago period. Long-term debt was $21,697 million compared with $19,320 million. The company maintained its debt-to-capital ratio at 45%.
Cash flow from operations was $6,412 million compared with $6,755 in the year ago period, while capital expenditures were $1.7 billion. Free cash flow for the year came in at $4.7 billion.
Guidance Affirmed
Incorporating its improved expectations for organic sales growth in the near future, United Technologies affirmed its guidance for 2017. The company expects adjusted earnings in the range of $6.30 to $6.60 per share on revenues of $57.5 to $59 billion.
The company reaffirmed its acquisition expectations of $1–$2 billion and free cash flow guidance in the range of 90–100% of net income. It also plans to repurchase shares worth $3.5 billion in 2017.
United Technologies currently has a Zacks Rank #3 (Hold).
Hitachi has a long-term earnings growth expectation of 13% and is currently trading at a forward P/E of 14.3x.
Barloworld has a long-term earnings growth expectation of 18.70% and is currently trading at a forward P/E of 11.04x.
FactSet has a long-term earnings growth expectation of 10.7% and is currently trading at a forward P/E of 23.7x.
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United Technologies (UTX) Q4 Earnings Match, Affirms View
United Technologies Corporation reported fourth-quarter 2016 adjusted earnings (from continuing operations) of $1.56 per share, in line with the Zacks Consensus Estimate.
GAAP earnings (from continuing operations) were $1.26 per share as against a loss of 30 cents in the year-ago quarter.
The company’s bottom line benefited from organic sales growth, driven by robust performance of the company’s Climate, Controls & Security businesses.
Adjusted net sales for the fourth quarter were $14,659 million compared with $14,652 million in the year-earlier quarter. Revenues beat the Zacks Consensus Estimate of $14,620 million. The rise was primarily attributable to improved performance in majority of its segments, except Otis and Aerospace.
For full-year 2016, the company reported adjusted earnings (from continuing operations) of $6.61 per share compared with prior-year earnings of $6.30. Adjusted revenues for 2016 were $57,428 million compared with $56,450 million in the prior year. The improvement in revenues was primarily attributed to the company’s Pratt & Whitney and Aerospace segment.
Segmental Results
Despite persistent volatility in foreign currency, revenues from most of the company's segments during the reported quarter were higher than the prior-year period.
Adjusted revenues at UTC Climate Controls & Security were $4,249 million, up 3.1% from $4,122 million in the year-ago quarter. Pratt & Whitney’s revenues increased to $3,992 million from $3,981million in the year-ago quarter. However, UTC Aerospace Systems’ sales were down 1.9% to $3,598 million from $3,667 million in the fourth quarter. Otis’ revenues were $3,063 million compared with $3,094 million in the prior-year quarter.
Adjusted operating profit at UTC Climate Controls & Security increased year over year to $680 million from $659 million in the year-ago quarter. Pratt & Whitney’s operating profit decreased to $470 million from $551 million in the year-earlier period, while UTC Aerospace Systems’ operating profit improved 4.4% year over year to $595 million. Operating profit at Otis declined to $534 million in the reported quarter from $561 million in the prior-year quarter.
United Technologies’ adjusted consolidated operating profit in the reported quarter was $2,160 million, up from $2,155 million in the prior-year period. Operating profit margin came in at 15.3% in the quarter, down from 15.7% in the year-earlier period.
United Technologies Corporation Price, Consensus and EPS Surprise
United Technologies Corporation Price, Consensus and EPS Surprise | United Technologies Corporation Quote
Balance Sheet and Cash Flow
As of Dec 31, 2016, cash and cash equivalents were $7,157 million compared with $7,075 million in the year ago period. Long-term debt was $21,697 million compared with $19,320 million. The company maintained its debt-to-capital ratio at 45%.
Cash flow from operations was $6,412 million compared with $6,755 in the year ago period, while capital expenditures were $1.7 billion. Free cash flow for the year came in at $4.7 billion.
Guidance Affirmed
Incorporating its improved expectations for organic sales growth in the near future, United Technologies affirmed its guidance for 2017. The company expects adjusted earnings in the range of $6.30 to $6.60 per share on revenues of $57.5 to $59 billion.
The company reaffirmed its acquisition expectations of $1–$2 billion and free cash flow guidance in the range of 90–100% of net income. It also plans to repurchase shares worth $3.5 billion in 2017.
United Technologies currently has a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the same space include Hitachi, Ltd. (HTHIY - Free Report) , FactSet Research Systems Inc. (FDS - Free Report) and Barloworld Ltd. (BRRAY - Free Report) . All three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
Hitachi has a long-term earnings growth expectation of 13% and is currently trading at a forward P/E of 14.3x.
Barloworld has a long-term earnings growth expectation of 18.70% and is currently trading at a forward P/E of 11.04x.
FactSet has a long-term earnings growth expectation of 10.7% and is currently trading at a forward P/E of 23.7x.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>