United Technologies Corporation reported better-than-expected results in second-quarter 2017.
Earnings and Revenues
Quarterly adjusted earnings from continuing operations came in at $1.85 per share, beating the Zacks Consensus Estimate of $1.77. The bottom line also came in 1.6% higher than the year-ago tally. The upside was driven by solid organic sales and acquisition-based growth.
Net sales in the reported quarter came in at $15.28 billion, outpacing the Zacks Consensus Estimate of $15.18 billion. In addition, the top line came in 2.7% higher than the prior-year figure.
Segmental Details
United Technologies generates revenues from four segments:
Net sales of Otis were $3,131 million, up 1.1% year over year.
Aggregate quarterly revenues of UTC Climate, Controls & Security came in at $4,712 million, up 5.7% year over year.
Pratt & Whitney revenues were $4,070 million, up 6.7% year over year.
Sales of UTC Aerospace Systems in the quarter came in at $3,640 million, down 2% year over year.
Costs and Margins
Cost of goods sold in second-quarter 2017 was $11.1 billion as against $10.7 billion recorded in the comparable period last year. Selling, general and administrative expenses came in at $1,538 million, up 6% year over year.
Operating profit margin was 15%, down 70 basis points (bps) year over year.
Balance Sheet and Cash Flow
United Technologies exited the second quarter with cash and cash equivalents of $9,345 million, higher than $7,157 million recorded at the end of 2016. Long-term debt was $23,883 million, up from $21,697 million as of Dec 31, 2016.
In first-half 2017, United Technologies generated net cash of $3,139 million from its operating activities, up from $2,606 million recorded in the year-ago period. Capital spent on additions of property, plant and equipment totaled $771 million, up 18.8% year over year.
Outlook
United Technologies is poised to grow on the back of innovation investments, robust backlog and strategic cost-reduction efforts. Backed by these positives, the company raised the lower end of its full-year 2017 earnings guidance. Adjusted earnings are currently anticipated to lie within the $6.45–$6.60 per share range, as against the previously estimated range of $6.30−$6.60. Additionally, this Zacks Rank #3 (Hold) company lifted its revenue guidance for 2017 from the previous projection of $57.5–$59 billion to $58.5–$59.5 billion (estimating an organic growth of 3–4% year over year).
Stocks to Consider
A few better-ranked stocks in the industry are listed below:
Federal Signal Corporation (FSS - Free Report) generated an average positive earnings surprise of 3.10% over the trailing four quarters and currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Crane Company (CR - Free Report) , which carries a Zacks Rank #2 (Buy) at present, pulled off an average positive earnings surprise of 8.41% over the last four quarters.
Honeywell International Inc. (HON - Free Report) currently holds a Zacks Rank #2 and has an average positive earnings surprise of 1.99% for the past four quarters.
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United Technologies Corporation reported better-than-expected results in second-quarter 2017.
Earnings and Revenues
Quarterly adjusted earnings from continuing operations came in at $1.85 per share, beating the Zacks Consensus Estimate of $1.77. The bottom line also came in 1.6% higher than the year-ago tally. The upside was driven by solid organic sales and acquisition-based growth.
Net sales in the reported quarter came in at $15.28 billion, outpacing the Zacks Consensus Estimate of $15.18 billion. In addition, the top line came in 2.7% higher than the prior-year figure.
Segmental Details
United Technologies generates revenues from four segments:
Net sales of Otis were $3,131 million, up 1.1% year over year.
Aggregate quarterly revenues of UTC Climate, Controls & Security came in at $4,712 million, up 5.7% year over year.
Pratt & Whitney revenues were $4,070 million, up 6.7% year over year.
Sales of UTC Aerospace Systems in the quarter came in at $3,640 million, down 2% year over year.
Costs and Margins
Cost of goods sold in second-quarter 2017 was $11.1 billion as against $10.7 billion recorded in the comparable period last year. Selling, general and administrative expenses came in at $1,538 million, up 6% year over year.
Operating profit margin was 15%, down 70 basis points (bps) year over year.
Balance Sheet and Cash Flow
United Technologies exited the second quarter with cash and cash equivalents of $9,345 million, higher than $7,157 million recorded at the end of 2016. Long-term debt was $23,883 million, up from $21,697 million as of Dec 31, 2016.
In first-half 2017, United Technologies generated net cash of $3,139 million from its operating activities, up from $2,606 million recorded in the year-ago period. Capital spent on additions of property, plant and equipment totaled $771 million, up 18.8% year over year.
Outlook
United Technologies is poised to grow on the back of innovation investments, robust backlog and strategic cost-reduction efforts. Backed by these positives, the company raised the lower end of its full-year 2017 earnings guidance. Adjusted earnings are currently anticipated to lie within the $6.45–$6.60 per share range, as against the previously estimated range of $6.30−$6.60. Additionally, this Zacks Rank #3 (Hold) company lifted its revenue guidance for 2017 from the previous projection of $57.5–$59 billion to $58.5–$59.5 billion (estimating an organic growth of 3–4% year over year).
Stocks to Consider
A few better-ranked stocks in the industry are listed below:
Federal Signal Corporation (FSS - Free Report) generated an average positive earnings surprise of 3.10% over the trailing four quarters and currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Crane Company (CR - Free Report) , which carries a Zacks Rank #2 (Buy) at present, pulled off an average positive earnings surprise of 8.41% over the last four quarters.
Honeywell International Inc. (HON - Free Report) currently holds a Zacks Rank #2 and has an average positive earnings surprise of 1.99% for the past four quarters.
More Stock News: Tech Opportunity Worth $386 Billion in 2017
From driverless cars to artifical intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.
Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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