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United Technologies (UTX) Q2 Earnings: Is a Beat in Store?

Diversified conglomerate, United Technologies CorporationUTX is scheduled to report second-quarter 2017 results before the opening bell on Jul 25. In the last reported quarter, the company's earnings beat the Zacks Consensus Estimate by 9 cents. United Technologies boasts an average positive earnings surprise of 5.38% for the trailing four quarters, beating estimates on three occasions.

Let's see how things are shaping up for this announcement.

Why a Likely Positive Surprise?

Our proven model shows that United Technologies is likely to beat earnings this time. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is exactly the case here as you will see below.

Zacks ESP: Earnings ESP is the difference between the Most Accurate estimate and the Zacks Consensus Estimate. United Technologies' Earnings ESP is +2.26% as the Most Accurate estimate of $1.81 is higher than the Zacks Consensus Estimate of $1.77. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

United Technologies Corporation Price and EPS Surprise

United Technologies Corporation Price and EPS Surprise | United Technologies Corporation Quote

Zacks Rank: United Technologies' Zacks Rank #3 when combined with a positive ESP makes surprise prediction likely.

Note we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

What's Driving the Better-than-Expected Results?

On Mar 27, 2017, Automated Logic Corporation, part of a United Technologies unit collaborated with Lucid, to create the next generation of EnergyReports energy analysis and reporting tool. Per the deal, the new EnergyReports tool will combine building data from ALC's powerful WebCTRL building automation system with Lucid's industry-leading BuildingOS cloud-based energy management platform. This collaboration will enable the company to provide better solutions to its customers, which will help boost revenues in the to-be-reported quarter.

Also, the company expanded its presence in China with the Wuhan Metro contract. Per the contract, Otis Electric, a unit of United Technologies will provide 230 elevators and escalators to Wuhan, bringing the total tally of Otis units on the Wuhan network to over 1,000. Wuhan Metro and Otis Electric have a long-standing relationship dating back to 2004, when Line 1 went into operation. Since then, Otis Electric has been the primary supplier of elevators and escalators in the city.

On Jun 19, 2017, UTC Aerospace Systems - a unit of United Technologies - was awarded a contract to start the upgradation of propellers for the U.S. Air National Guard LC-130 aircraft with the installation of the NP2000 propeller system. Per the contract, the company will upgrade 12 of the U.S Air National Guard's fleet of LC/C-130H aircraft. This deal highlights the company's commitment with the defence forces to provide best in class services. It looks forward to retrofit these 12 aircraft and helping the U.S. National Guard accomplish missions without any hindrance.

The company continued to secure various deals across all of its segments, which will have a positive impact on its revenues. Despite a challenging macroeconomic environment and continuous investments in the aerospace segment, the company expects to generate significant cash from operations to reward its shareholders with a risk-adjusted return.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

The CIT Group Inc. CIT has an Earnings ESP of + 10.53% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here.

Caterpillar Inc. CAT has an Earnings ESP of +4.92% and a Zacks Rank #2.

Avery Dennison Corporation AVY has an Earnings ESP of +1.68% and a Zacks Rank #2.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

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United Technologies Corporation (UTX): Free Stock Analysis Report

CIT Group Inc (DEL) (CIT): Free Stock Analysis Report

Caterpillar, Inc. (CAT): Free Stock Analysis Report

Avery Dennison Corporation (AVY): Free Stock Analysis Report

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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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