United Technologies Corp
), a leading provider of high-technology products, reported
fourth quarter 2012 earnings of $1.04 per share versus $1.42 in
the year-ago quarter. The reported earnings beat the Zacks
Consensus Estimate of $1.02. For 2012, EPS of $5.35 was
essentially flat compared to the prior year, but ahead of
the Zacks Consensus Estimate of $5.32.
Total revenue for the fourth quarter grew 14% year over year to
$16.4 billion, but marginally missed the Zacks Consensus Estimate
of $16.5 billion. Organic sales growth was flat in the quarter
and foreign currency translation had a negative impact of 1
However, acquisitions contributed 15 points growth to the top
line. For 2012, total revenue stood at $57.7 billion, up 4% year
over year, including the effects of net acquisitions (6 points)
and negative foreign currency translation (2 points).
New equipment orders at Otis were up 12% over the year-earlier
quarter. North American Residential HVAC new equipment orders at
the company's UTC Climate, Controls & Security was up 20%.
Commercial spares orders at Pratt & Whitney's large engine
business dipped 8%, while that of UTC Aerospace Systems declined
4%. However, large commercial engine spares orders were up
46 % at Pratt & Whitney.
Otis reported revenues of $3,205 million in fourth quarter
down 0.18% year over year. At the same time, revenue at UTC
Climate Controls & Security declined 6% year over year to
$4,147 million. Pratt & Whitney revenue increased 10.5% year
over year to $3891 million in fourth quarter while UTC
Aerospace systems sales went up 60% year over year to $3174
million. Additionally, Sikorsky sales were up 3% year over year
to $2176 million in fourth quarter.
Balance Sheet and Cash Flow
The company continues to maintain a strong cash flow
position. As of Dec, 30, 2012, cash and cash equivalents
were $4.8 billion with long-term debt of $21.6 billion. The
company had a debt to capital ratio of 46.0%. Cash flow from
operations was $6.6 billion, while capital expenditures were $1.4
billion for 2012.
In order to come up with innovative products amid a
challenging macroeconomic environment, United Technologies
invested $2.4 billion in developing game-changing technologies
and nearly $600 million on restructuring initiatives.
Cocurrent with the strong quarterly and full-year results and
based on its improved order trends, sales in 2013 are expected to
be in the range of $64 billion to $65 billion, while earnings are
expected to be in the range of $5.85 to $6.15 per share.
United Technologies repositioned its portfolio in fiscal 2012
with the completion of the Goodrich acquisition and IAE
transactions and the divestiture of several non-strategic assets
with its main focus on the core markets.
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UTD TECHS CORP (UTX): Free Stock Analysis
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However, the company needs to be wary of its competitors, which
include formidable names such as
Federal Signal Corp
United Technologies currently has a Zacks Rank #3 (Hold). One of
Tyco International Ltd
) carries a Zacks Rank #1 (Strong Buy).