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Sep. 29, 2015, 12:45 PM
- Some of the biggest U.S. weapons programs could be disrupted by a stopgap budget measure that caps federal funding at prior-year levels and prevents the launch of new programs and multiyear deals, as time is running out for lawmakers to reach an agreement on next year’s spending before the current federal budget expires on Sept. 30.
- The U.S. Air Force estimates it stands to lose $13B in additional funding from such a stopgap, affecting ~60 programs including the award of a bomber deal for which a team of Boeing (BA +0.1%) and Lockheed Martin (LMT +0.3%) is vying with Northrop Grumman (NOC +0.1%).
- The Air Force wants to protect the Boeing deal, which leaves the company responsible for any costs exceeding $4.9B; Boeing has taken $1.3B in charges because of problems with the KC-46A refueling tanker, which flew for the first time on Sept. 25, and the Air Force wants to avoid a new deal that could expose it to paying for any further glitches.
- A stopgap also could cap next year’s spending on LMT's F-35, the Pentagon’s largest program, at $8.6B vs. the requested $11B, which would cut 19 jets from next year’s planned order and disrupt efforts to cut the jet’s cost by raising annual production to 120 planes over the next three years; the F-35’s suppliers include United Technologies (UTX +0.7%) Pratt & Whitney unit, which makes the engine.
Sep. 24, 2015, 6:59 PM
- Barclays analyst Carter Copeland sees "some changes for the better buried underneath a lot of the recent pain” at United Technologies (NYSE:UTX), just a month after warning investors to stay far away from the company.
- Although still concluding that meaningful change that can benefit investors remains 6-12 months out, Copeland says his discussions with management and observations on recent commentary suggest that 2016 has "good potential to be the re-building year that we hoped 2015 could be on several fronts."
- UTX leadership is getting the company’s house in order, the analyst says, seeing actions taken over the course of this year that should help to enable better planning, more decisive action from the C-suite, and greater accountability.
Sep. 24, 2015, 9:51 AM
- U.S. officials have approved Lockheed Martin's (LMT -1.3%) $9B takeover of United Technologies' (UTX -1.3%) Sikorsky Aircraft unit.
- Authorities in Japan and South Korea previously cleared the deal, but the company is still waiting for other regulatory approvals.
- Multiple sources say Lockheed is now likely to close the acquisition well before the end of 2015, as initially expected.
Sep. 17, 2015, 5:34 PM
- United Technologies (NYSE:UTX) is unlikely to hit its traditional target of growing earnings by at least 10% in 2016, as it confronts challenges to its jet engine and China businesses, CEO Greg Hayes said today at a Morgan Stanley investor conference.
- Hayes says UTX's China business, which represents 6% of the company's overall revenue, could fall 10% next year.
- The CEO also says he does not foresee any major acquisitions soon, apparently reversing an earlier position, and instead expects to use cash to buy back more shares.
Sep. 17, 2015, 12:18 PM
- GE (GE -0.8%) says it plans to create a development center for turboprop engines in Europe, again citing the failure of the U.S. Congress to reauthorize the U.S. Export-Import Bank.
- GE says it will invest more than $400M in the European turboprop engine development, testing and production operation, creating 500-1,000 jobs, and plans an additional $78M in similar investments for Canada and Brazil.
- GE Aviation says it would be at a competitive disadvantage with turboprop rival Pratt & Whitney Canada, a division of United Technologies (NYSE:UTX), because Pratt can provide government-backed credit assistance to its customers.
- The news comes after GE said on Tuesday it plans to shift up to 500 U.S. power turbine manufacturing jobs to Europe and China because it can no longer access Export-Import Bank financing.
Sep. 15, 2015, 10:41 AM
- Pratt & Whitney (UTX +1.2%) says it is working closely with suppliers to prepare for a large ramp-up in production in coming years of the F135 engine that powers Lockheed Martin's (LMT +0.1%) F-35 jet.
- The head of Pratt's military engines division says the company is seeking to ensure it has at least two suppliers for every major component, and is carrying out production readiness reviews of key suppliers and the companies that build parts for them.
- The exec says the company is in negotiations with the U.S. Department of Defense for ~160 engines in the next two low-rate production contracts, and agreement should be reached before year-end.
Sep. 10, 2015, 10:07 AM
- United Technologies (UTX -0.8%) announces a reorganization that includes operating subsidiaries Otis Elevator and United Technologies Climate, Controls & Security as stand-alone businesses with new presidents.
- The reorg comes after sales at Otis fell 7.5% in the first six months of the year from a year ago amid China's economic slowdown.
- Philippe Delpech is named president of Otis, and Robert McDonough will become president of United Technologies Climate, Controls & Security, which includes brands such as Carrier air conditioners and Chubb security systems.
Aug. 31, 2015, 2:26 PM
- United Technologies (UTX -1.3%) is lower, as a bearish view from Barclays, which earlier downgraded its rating to Equal Weight from Overweight with a $100 price target, cut from $120, appears to take precedence over Cowen's reiteration of the stock with an Outperform rating.
- Barclays believes further cuts lay ahead for 2016 at UTX and visibility is still low for 2017, lessening the potential for multiple expansion on what it sees as a very rare up-revenue/down-EPS year in 2016; foreign currency headwinds will impair the few areas of growth as UTX's Otis China volumes will continue to be under growing pressures from known issues, the firm says.
- However, Cowen contends that UTX's risk/reward is compelling, and that the company's aftermarket driven franchises are intact with expectations for solid earnings and free cash flow gains.
Aug. 31, 2015, 8:18 AM
Aug. 20, 2015, 12:21 PM
- The WSJ reports United Technologies (UTX -1.6%) is in talks to buy HVAC/air quality/security system maker Nortek (NASDAQ:NTK).
- Nortek spiked higher on the report before getting halted.
- Update (12:23PM ET): Nortek has resumed trading, and is now up 17.6%.
- Update 2 (12:35PM ET): The full story is up. No potential deal price is given.
Aug. 6, 2015, 9:48 AM
- United Tech (UTX +0.1%) Chief Executive Greg Hayes is considering appointing a single leader to head its lagging Otis elevator business, as part of a broader plan to restructure the company’s commercial building unit.
- The building division, which also makes Carrier air conditioners, accounts for 46% of the conglomerate’s $65.1B in annual revenue.
- "Otis is not broken, but it can be better," Hayes said in an interview. "I think we have perhaps taken our eye off of the growth ball."
- The new move could be announced as soon as next month.
Jul. 27, 2015, 7:45 AM
- Geraud Darnis, CEO of UTC Building & Industrial Systems, has informed United Technologies (NYSE:UTX) of his decision to retire in January 2016.
- Darnis was named to his current position in September 2013. Earlier in his career, he had served as President of UTC's Climate, Controls & Security business.
Jul. 24, 2015, 10:16 AM
- The U.S. Department of Justice has told Sikorsky Aircraft that it has launched a criminal investigation, alleging the helicopter maker had overbilled the U.S. Navy for a contract.
- The DoJ informed Sikorsky of the probe on July 13 and said it is seeking ~$148M in claims, Sikorsky's parent United Technologies (UTX -0.5%) said in an SEC filing.
- UTX says it is cooperating with the investigation but that it does not believe it is likely to lose the case.
- The complaint comes as UTX hopes to complete its announced $9B sale of Sikorsky to Lockheed Martin (LMT -0.2%).
Jul. 21, 2015, 12:25 PM
- United Technologies (UTX -7.7%) suffers its biggest decline in dollar terms since September 2001, after warning that profit at its UTC Aerospace Systems and Otis elevator unit would be lower than expected in 2015.
- RBC says UTX's cut to 2015 guidance was significantly larger than it had expected, even though the company had cautioned at the Paris Air Show on both aerospace and Otis; the slump in the aerospace aftermarket is especially grim, the firm says, as the business had offset weak aftermarket growth in the Pratt & Whitney jet engine business.
- Sterne Agee CRT, which had said yesterday it was time to buy UTX after its sale of Sikorsky Aircraft, says softer end markets are hurting UTX's core legacy franchises but it would “look to add on weakness reflecting the likelihood of more aggressive buybacks and M&A."
Jul. 21, 2015, 7:52 AM
- Net profit of $1.54B, or $1.73 per share vs. $1.68B, or $1.84 a share, in the same period a year ago. Excluding one-time items and restructuring charges, adjusted earnings per share were $1.81.
- Sales by segment: Otis -8%; UTC Climate, Controls & Security +1%; Pratt & Whitney +2%; UTC Aerospace flat; Sikorsky -29%.
- Yesterday, UTC reached an agreement to sell Sikorsky to Lockheed Martin for $9B. Sikorsky will be reported in discontinued operations beginning in Q3.
- "With six months of trends behind us, it is now clear the commercial aftermarket at UTC Aerospace Systems will be significantly below our expectations for the year," said CEO Gregory Hayes. We now expect 2015 operating profit at UTC Aerospace Systems to be down $25M-$75M and at Otis to be down $25M-$75M at constant currency.
- Full year guidance: EPS from continuing operations of $6.15-$6.30 (including Sikorsky) vs. $6.35 to $6.55. Sales expectations from continuing operations have been revised to $57B-$58B from $58B-$59B.
- UTX -4.1% premarket
- Q2 results
Jul. 21, 2015, 7:07 AM
- United Technologies (NYSE:UTX): Q2 EPS of $1.81 beats by $0.10.
- Revenue of $16.33B (-5.0% Y/Y) misses by $190M.
United Technologies Corp provides high technology products and services to the building systems and aerospace industries. Its business segments are Otis, UTC Climate, Controls & Security, Pratt & Whitney, UTC Aerospace Systems and Sikorsky.
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