Post Earnings Coverage as United Technologies Earnings Met Expectations; Reaffirmed FY17 Outlook

Upcoming AWS Coverage on Transdigm Group

LONDON, UK / ACCESSWIRE / February 2, 2017 / Active Wall St. announces its post-earnings coverage on United Technologies Corp. (NYSE: UTX). The Company released its fourth quarter fiscal 2016 results on January 24, 2017. The maker of elevators, jet engines and other products’ sales numbers exceeded market estimates. Register with us now for your free membership at:

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One of United Technologies’ competitors within the Aerospace/Defense Products & Services space, Transdigm Group Inc. (NYSE: TDG), is estimated to report earnings on February 14, 2017. AWS will be initiating a research report on Transdigm Group following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on UTX; touching on TDG. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=UTX

http://www.activewallst.com/registration-3/?symbol=TDG

Earnings Reviewed

For the quarter ended on December 31, 2016, United Technologies reported sales of $14.66 billion up 3% over the prior year sales of $14.30 billion, surpassing analysts’ estimates of $14.62 billion. The Company’s FY16 sales of $57.2 billion increased by 2%, as 2 points of organic sales growth and 1 point of net acquisitions growth were partially offset by 1 point of adverse foreign exchange.

United Technologies’ consolidated operating profit in the reported quarter was $1.64 billion up from $392 million in the prior year’s same period.
The Company’s operating profit margin came in at 15.3% in Q4 2016, down from 15.7% in Q4 2015.

For Q4 2016, United Technologies’ net income was $1.01 billion, down from net income of $3.28 billion in the year earlier corresponding quarter. On a per-share basis, the Company posted earnings of $1.26, up from net loss of $0.30 in Q4 2015. United Technologies’ adjusted earnings per share were $1.56, up 2% versus the prior year and in-line with analysts’ consensus estimates.

The Company’s net income for FY16 was $5.1 billion, up 27% versus the prior year. FY16 EPS of $6.13 was up 35% versus the prior year. United Technologies’ FY16 results included $0.48 of net restructuring and other significant items, compared to $1.77 in FY15. The Company’s adjusted EPS for FY16 of $6.61 increased 5% on a y-o-y basis.

Segmental Results

During Q4 2016, revenues from United Technologies’ UTC Climate Controls & Security segment were $4.25 billion, up 3.1% from $4.12 billion in Q4 2015. Equipment orders at the division increased by 2% on a y-o-y basis. For Q4 2016, adjusted operating profit at UTC Climate Controls & Security increased to $680 million from $659 million in Q4 2015.

The Company’s Pratt & Whitney’s revenues increased to $3.99 billion in the reported quarter compared to revenues of $3.98 billion in the year-ago same quarter. Commercial aftermarket sales were down 6% on a y-o-y basis at Pratt & Whitney, Pratt & Whitney’s operating profit decreased to $470 million in Q4 2016 from $551 million in Q4 2015.

For Q4 2016, United Technologies’ UTC Aerospace Systems’ sales declined to $3.59 billion compared to sales of $3.67 billion in Q4 2015. Commercial aftermarket sales were up 3% on a y-o-y basis at the division. UTC Aerospace Systems’ operating profit improved 4.4% y-o-y to $595 million.

United Technologies Otis’ revenues were $3.06 billion in Q4 2016 compared to $3.09 billion in the prior year’s comparable quarter. In the reported quarter, Otis new equipment orders increased 3% versus the prior year at constant currency, including China where new equipment orders were flat. Operating profit at Otis declined to $534 million in the reported quarter from $561 million in the year ago corresponding period.

Cash Flow & Balance Sheet

United Technologies’ free cash flow of $4.7 billion in FY16 was 93% of net income attributable to common shareowners. Cash flow from operations for FY16 was $6.4 billion (127% of net income attributable to common shareholders) and capital expenditures were $1.7 billion. As of December 31, 2016, the Company’s cash and cash equivalents were $7.16 billion compared to $7.08 billion in the year ago comparable period. Long-term debt was $21,697 million compared to $19,320 million.

Business Outlook

For FY17, United Technologies is forecasting adjusted EPS of $6.30 to $6.60, while total sales are expected to be in the range of $57.5 billion to $59 billion, with y-o-y growth of 1% to 3% including organic sales growth of 2% to 4%. The Company estimates generating free cash flow in the range of 90% to 100% of net income attributable to common shareowners.

Stock Performance

On February 01, 2017, United Technologies’ share price finished the trading session at $108.18, slipping 1.36%. A total volume of 4.67 million shares exchanged hands, which was higher than the 3 months average volume of 3.10 million shares. The stock has advanced 6.50% and 30.01% in the last three months and past twelve months, respectively. The stock is trading at a PE ratio of 17.66 and has a dividend yield of 2.44%.

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