United Technologies Forecasts Stronger Defense Sector and Housing Market, Falling Commodities Prices

Dec.14.06 | About: United Technologies (UTX)

Tech behemoth United Technologies Corporation expects earnings to increase by 10-14% in 2007 according to Chairman and CEO George David.utx EPS is expected in the $4.05 to $4.20 range; this year the expectation is for EPS of $3.68 or $3.69. The reason for the increased earnings projection is twofold: a strong aerospace and defense market and less (though continued) downward pressure on margins from raw metal commodities next year than this year as the price of most commodities is expected to fall. David also sees the housing market bottoming next year and beginning its turnaround meaning additional revenue for United Technologies. Its shares are up 15% this year, largely on par with the DJIA of which it's a member. In addition, the company recently announced a 60 million share buyback.
• Sources: Press Release, Reuters, CNN Money
• Related commentary: United Technologies Up On Strong Earnings: Past Stock Action Following Gap-Ups, On a New High and an Old Price: Most Investors Are 6 Years Closer to Death–And None the Richer, Cramer's Take on UTX
• Potentially impacted stocks and ETFs: United Technologies Corporation (NYSE:UTX). ETFs: iShares Dow Jones US Aerospace & Defense (NYSEARCA:ITA), iShares Dow Jones US Industrial (NYSEARCA:IYJ), PowerShares Aerospace & Defense (NYSEARCA:PPA), Vanguard Industrials (NYSEARCA:VIS)

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