United Technologies Corp. reported first quarter 2010 earnings per share from continuing operations of 98 cents, exceeding the Zacks Consensus Estimate of 90 cents. Revenues of $12.1 billion dipped 1% year over year, reflecting organic decline (4%), mostly offset by favorable foreign currency translation (3%).
New equipment order intake at Otis was up 9% over the year-ago quarter, including a 6% impact from the weaker dollar. Carrier's orders were up 37% (excluding favorable foreign exchange 4%) while Commercial HVAC new equipment orders were down 4% (excluding favorable foreign exchange 6%). Commercial spares book to bill ratios at both Pratt & Whitney's large aero-engine business and Hamilton Sundstrand were above 1.
Segment operating margin at 13.6% was 250 basis points higher than prior year. Adjusted for restructuring costs, segment operating margin was 180 basis points higher than that in the previous year. Net income attributable to common shareowners for the quarter increased 20% to $866 million.
Cash generation remains strong, driven by continued efficient deployment of working capital and control over capital expenditures. Cash and equivalents stood at $4.8 billion with long-term debt at $10 billion and shareowners' equity at $19.9 billion. Share repurchases in the quarter were $500 million and acquisition spending was $2.1 billion, including GE Security and Clipper Windpower.
UTX raised 2010 outlook based on solid execution. It expects 2010 EPS in the range of $4.50 to $4.65, up 9% to 13% on revenues of $54 billion to $55 billion.
The company has strong market positions in both aerospace and defense and global infrastructure with a portfolio that includes: Carrier, Otis, Hamilton Sundstrand, Pratt & Whitney, Sikorsky and Fire & Security.
UTX will be one of the few companies that can take advantage of strategic M&A once liquidity is restored and a functioning M&A markets re-emerge, which is likely in FY2010.
The company is likely to deliver double-digit earnings growth in FY10, given restructuring savings, growth in the highly-profitable aftermarket business and potential improvement in emerging markets construction activity; balancing other late-cycle exposures.
The financial performance of the company is dependent on the conditions of the construction and aerospace industries. The company is highly dependent on the U.S. Government's budgetary allocation for defense. Its business may also be impacted by government contracting risks.
The company designs, manufactures and services products that incorporate advanced technologies. The introduction of new products and technologies involves risks and the degree or timing of benefits may not be correctly anticipated.
United Technologies was incorporated in Delaware in 1934. It provides high technology products and services to the building systems and aerospace industries worldwide. Operating units include businesses with operations throughout the world. Otis, Carrier and UTC Fire & Security (collectively referred to as the commercial businesses) serve customers in the commercial and residential property industries worldwide.
We currently have a Neutral recommendation on UTX.
New equipment order intake at Otis was up 9% over the year-ago quarter, including a 6% impact from the weaker dollar. Carrier's orders were up 37% (excluding favorable foreign exchange 4%) while Commercial HVAC new equipment orders were down 4% (excluding favorable foreign exchange 6%). Commercial spares book to bill ratios at both Pratt & Whitney's large aero-engine business and Hamilton Sundstrand were above 1.
Segment operating margin at 13.6% was 250 basis points higher than prior year. Adjusted for restructuring costs, segment operating margin was 180 basis points higher than that in the previous year. Net income attributable to common shareowners for the quarter increased 20% to $866 million.
Cash generation remains strong, driven by continued efficient deployment of working capital and control over capital expenditures. Cash and equivalents stood at $4.8 billion with long-term debt at $10 billion and shareowners' equity at $19.9 billion. Share repurchases in the quarter were $500 million and acquisition spending was $2.1 billion, including GE Security and Clipper Windpower.
UTX raised 2010 outlook based on solid execution. It expects 2010 EPS in the range of $4.50 to $4.65, up 9% to 13% on revenues of $54 billion to $55 billion.
The company has strong market positions in both aerospace and defense and global infrastructure with a portfolio that includes: Carrier, Otis, Hamilton Sundstrand, Pratt & Whitney, Sikorsky and Fire & Security.
UTX will be one of the few companies that can take advantage of strategic M&A once liquidity is restored and a functioning M&A markets re-emerge, which is likely in FY2010.
The company is likely to deliver double-digit earnings growth in FY10, given restructuring savings, growth in the highly-profitable aftermarket business and potential improvement in emerging markets construction activity; balancing other late-cycle exposures.
The financial performance of the company is dependent on the conditions of the construction and aerospace industries. The company is highly dependent on the U.S. Government's budgetary allocation for defense. Its business may also be impacted by government contracting risks.
The company designs, manufactures and services products that incorporate advanced technologies. The introduction of new products and technologies involves risks and the degree or timing of benefits may not be correctly anticipated.
United Technologies was incorporated in Delaware in 1934. It provides high technology products and services to the building systems and aerospace industries worldwide. Operating units include businesses with operations throughout the world. Otis, Carrier and UTC Fire & Security (collectively referred to as the commercial businesses) serve customers in the commercial and residential property industries worldwide.
We currently have a Neutral recommendation on UTX.
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