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United Technologies Beats Earnings, Revenues Down Y/Y - Analyst Blog

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United Technologies CorporationUTX reported first-quarter 2015 net income of $1,426 million or $1.58 per share, up from $1,213 million or $1.32 in the year-ago quarter. The increase in earnings was driven by rise in aerospace sales and lower operating costs.

Excluding one-time items, recurring earnings for the quarter were $1.51 per share, up 7% year over year, which beat the Zacks Consensus Estimate of $1.44.

Total revenue for the first quarter decreased 1.0% year over year to $14,541 million. The decrease in revenues was primarily driven by the impact of adverse foreign exchange, partially offset by the benefit of organic growth. The reported revenues missed the Zacks Consensus Estimate of $14,961 million.

New equipment orders at Otis were up 8% from the year-earlier quarter. UTC Climate, Controls & Security equipment orders increased 6%. Commercial aerospace aftermarket sales increased 4% at UTC Aerospace Systems and 2% at Pratt & Whitney.

Segment Results

Otis reported revenues of $2,745 million in the reported quarter, down 7.1% year over year. Revenues at UTC Climate Controls & Security stood at $3,852 million versus $3,851 in the year-ago quarter. Pratt & Whitney revenues increased marginally by 0.9% to $3,332 million in the first quarter. UTC Aerospace systems sales increased 2.8% to $3,548 million. Sikorsky sales stood at $1,267 million versus $1,361 million in the year-ago quarter.

Operating profit of Otis decreased slightly to $527 million in the reported quarter from $570 million in the previous year. Operating profit at UTC Climate Controls & Security stood at $729 million versus $537 million in the year-ago period. Pratt & Whitney's operating profit improved 8.0% year over year to $419 million in the reported quarter, while UTC Aerospace systems operating profit decreased to $569 million from $590 million in the year-ago quarter. Sikorsky's operating profit increased 7.0% year over year to $92 million.

Consolidated segment operating profit in the fourth quarter stood at $2,274 million versus $2,098 million in the prior-year period. Operating margin stood at 15.8% versus 14.5% in the year-earlier quarter.

Balance Sheet and Cash Flow

At Mar 31, 2015, cash and cash equivalents were $5,281 million versus $ 5,235 million as of Dec, 31, 2014. Long-term debt stood at $17,809 million as of Mar, 31, 2015 versus $17,872 million as of Dec, 31, 2014. The company had a debt-to-capital ratio of 42.0%.

Cash flow from operations aggregated $1,310 million for the quarter compared with $1,335 million in the year ago quarter. Capital expenditures were $348 million in the quarter. The company completed the planned repurchased shares program worth $3.0 billion.

Outlook

Going Forward, United Technologies expects the commercial building business in the U.S. to improve and is likely to witness signs of growth in Europe.

The company reaffirmed its guidance and expects total revenue in 2015 to aggregate within $65 billion and $66 billion. Earnings are expected to be in the range of $6.85-$7.05 per share. The company expects acquisitions of $1 billion and cash flow from operations less capital expenditures in the range of 90% to 100% of net income in 2015.

United Technologies currently has a Zacks Rank #3 (Hold). Other stocks that look promising and are worth a look now include Compass Diversified Holdings. CODI , Carlisle Companies Inc. CSL and Icahn Enterprises, L.P. IEP , each carrying a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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