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United Technologies (UTX) Q1 Earnings Beat, Reaffirms View
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United Technologies Corporation reported first-quarter 2017 adjusted earnings (from continuing operations) of $1.48 per share, which beat the Zacks Consensus Estimate of $1.39.
GAAP earnings (from continuing operations) were $1.73 per share compared with $1.42 in the year-ago quarter.
The company’s bottom line benefited from organic sales growth, driven by robust performance of the company’s operational segments.
Adjusted net sales for the first quarter were $13,815 million compared with $13,357 million in the year-earlier quarter. Revenues beat the Zacks Consensus Estimate of $13,316 million. The rise was primarily attributable to improved performance across all its segments.
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 $3,892 million, up from $3,728 million in the year-ago quarter. Pratt & Whitney’s revenues increased to $3,758 million from $3,588 million in the year-ago quarter. UTC Aerospace Systems’ sales were $3,611 million compared with $3,505 million in first-quarter 2016. Otis’ revenues were $2,804 million compared with $2,715 million in the prior-year quarter.
Adjusted operating profit at UTC Climate Controls & Security decreased to $607 million from $634 million in the year-ago quarter. Pratt & Whitney’s operating profit declined to $393 million from $415 million in the year-earlier period while UTC Aerospace Systems’ operating profit improved year over year to $599 million from $551 million. Operating profit at Otis declined to $457 million in the reported quarter from $481 million in the prior-year quarter.
United Technologies’ adjusted consolidated operating profit in the reported quarter was $1,939 million, down from $2,007 million in the prior-year period. Operating profit margin came in at 14.6%, down from 15.4% in the year-earlier period.
Balance Sheet and Cash Flow
As of Mar 31, 2017, cash and cash equivalents were $7,156 million. Long-term debt was $20,898 million. The company maintained its debt-to-capital ratio at 46%.
Cash flow from operations was $993 million compared with $798 in the year-ago period while capital expenditures were $325 million. Free cash flow for the quarter came in at $668 million.
United Technologies Corporation Price, Consensus and EPS Surprise
Incorporating its improved expectations for organic sales growth in the near future, United Technologies reaffirmed its guidance for 2017. The company expects adjusted earnings in the range of $6.30–$6.60 per share on revenues of $57.5–$59 billion.
The company’s acquisition expectation is between $1billion and $2 billion and free cash flow guidance is 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).
3M has a long-term earnings growth expectation of 9.7% and is currently trading at a forward P/E of 22.5x.
Crane Co. has a long-term earnings growth expectation of 10.10%.
Bunzl has a long-term earnings growth expectation of 7.5% and is currently trading at a forward P/E of 21.3x.
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United Technologies (UTX) Q1 Earnings Beat, Reaffirms View
United Technologies Corporation reported first-quarter 2017 adjusted earnings (from continuing operations) of $1.48 per share, which beat the Zacks Consensus Estimate of $1.39.
GAAP earnings (from continuing operations) were $1.73 per share compared with $1.42 in the year-ago quarter.
The company’s bottom line benefited from organic sales growth, driven by robust performance of the company’s operational segments.
Adjusted net sales for the first quarter were $13,815 million compared with $13,357 million in the year-earlier quarter. Revenues beat the Zacks Consensus Estimate of $13,316 million. The rise was primarily attributable to improved performance across all its segments.
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 $3,892 million, up from $3,728 million in the year-ago quarter. Pratt & Whitney’s revenues increased to $3,758 million from $3,588 million in the year-ago quarter. UTC Aerospace Systems’ sales were $3,611 million compared with $3,505 million in first-quarter 2016. Otis’ revenues were $2,804 million compared with $2,715 million in the prior-year quarter.
Adjusted operating profit at UTC Climate Controls & Security decreased to $607 million from $634 million in the year-ago quarter. Pratt & Whitney’s operating profit declined to $393 million from $415 million in the year-earlier period while UTC Aerospace Systems’ operating profit improved year over year to $599 million from $551 million. Operating profit at Otis declined to $457 million in the reported quarter from $481 million in the prior-year quarter.
United Technologies’ adjusted consolidated operating profit in the reported quarter was $1,939 million, down from $2,007 million in the prior-year period. Operating profit margin came in at 14.6%, down from 15.4% in the year-earlier period.
Balance Sheet and Cash Flow
As of Mar 31, 2017, cash and cash equivalents were $7,156 million. Long-term debt was $20,898 million. The company maintained its debt-to-capital ratio at 46%.
Cash flow from operations was $993 million compared with $798 in the year-ago period while capital expenditures were $325 million. Free cash flow for the quarter came in at $668 million.
United Technologies Corporation Price, Consensus and EPS Surprise
United Technologies Corporation Price, Consensus and EPS Surprise | United Technologies Corporation Quote
Guidance Reaffirmed
Incorporating its improved expectations for organic sales growth in the near future, United Technologies reaffirmed its guidance for 2017. The company expects adjusted earnings in the range of $6.30–$6.60 per share on revenues of $57.5–$59 billion.
The company’s acquisition expectation is between $1billion and $2 billion and free cash flow guidance is 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 industry include 3M Company (MMM - Free Report) , Crane Co. (CR - Free Report) and Bunzl plc (BZLFY - 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.
3M has a long-term earnings growth expectation of 9.7% and is currently trading at a forward P/E of 22.5x.
Crane Co. has a long-term earnings growth expectation of 10.10%.
Bunzl has a long-term earnings growth expectation of 7.5% and is currently trading at a forward P/E of 21.3x.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more.
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