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Apr. 11, 2015, 9:21 AM
- After Friday's 10.8% moonshot, General Electric (NYSE:GE) sells for 16x 2015 estimated earnings, writes Avi Salzman, a pretty rich multiple considering the company's industrial businesses have boosted operating earnings by an average 1.4% annually for the last four years.
- United Technologies (NYSE:UTX) trades at a 16 multiple, but has grown operating earnings by an average 4.9% over that period, and Honeywell (NYSE:HON) sells for 17x after growing earnings by an average 16%.
- "Here’s the problem: The assets they have deployed in the finance unit were generating a lot of earnings,” says a fund manager and longtime GE owner. “As they sell those down, they have to replace them with industrial earnings or share buybacks. There’s going to be a period of time where earnings will be stagnant ... The Street will get bored waiting."
- Previously: GE's move away from finance sets up industrial deals, Immelt says (April 10)
- Previously: GE sets plan to exit almost all of GE Capital; launches $50B buyback (April 10)
Apr. 7, 2015, 9:14 AM
- United Technologies (NYSE:UTX) won its appeal of U.S. government claims that it was overcharged for Pratt & Whitney jet engines, as a U.S. Circuit Judge in Ohio yesterday ruled that the government never proved damages.
- The case was remanded to the trial court that had ordered UTX to pay $657M in damages.
- The Justice Department accused UTX subsidiary Pratt & Whitney of violating the False Claims Act, resulting in alleged overpayments for F100 jet engines during 1985-90.
Apr. 2, 2015, 3:42 PM
- United Technologies' (UTX +1.1%) Pratt & Whitney division says it has signed nearly 200 long-term agreements, involving projected spending of more than $18B with key global product suppliers.
- UTX says the agreements will help it support increased production levels as it prepares for an expected doubling in engine production by the end of the decade.
- P&W has an installed base of more than 12K engines, but the number of V2500 and geared turbofan engines on the company’s backlog is even higher; the GTF engine is set for installation on the Bombardier CS100, the A320neo from Airbus and commercial jets from Mitsubishi, Embraer and Irkut.
- Earlier: UTX names Sikorsky president
Apr. 2, 2015, 8:59 AM
- United Technologies (NYSE:UTX) appoints Robert Leduc as President of Sikorsky Aircraft, succeeding Mick Maurer, who will move to the newly created position of UTC Senior Vice President, Strategic Projects.
- "It is a great pleasure to welcome Bob back to United Technologies," said CEO Gregory Hayes.
- Prior to his retirement in 2014, Leduc held numerous senior leadership positions during his 35-year career at UTX.
- Related: United Tech CEO sheds light on possible Sikorsky spinoff (Mar. 12 2015)
Apr. 1, 2015, 3:30 PM
- Actavis (ACT -1%) should outperform following its purchase of Allergan, and FDA action dates for eluxadoline and cariprazine could also be catalysts.
- Though Occidental Petroleum is the team's top pick in energy, Anadarko (APC +1.1%) is the best short-term play on a recovery in oil prices.
- Strong fundamentals and easy year-over-year comps make AvalonBay (AVB -0.9%) a pick in apartment rentals.
- A favorable Supreme Court ruling in King vs. Burwell by the end of June provides plenty of upside possibility with little downside for HCA Holdings (HCA -0.8%).
- Also on the buy list are Ingersoll-Rand (IR -1.5%), Nvidia (NVDA +0.2%), UTX (UTX -1.1%), and Disney (DIS +0.4%).
- Making the underperform list is the Gap (GPS -2.2%) thanks to less room for cost cutting and a forecast for continued weakness in sales. Also a Q2 sell: Tesla (TSLA -1%) " lacks any real technological advantage over its competitors" says the team, seeing a significant Q1 loss, an increase in the already-high cash burn, and a questionable delivery outlook.
- Source: Benzinga
Mar. 23, 2015, 8:17 AM
- United Tech (NYSE:UTX) unit UTC Aerospace Systems has received a contract from the Naval Surface Warfare Center to provide sonar domes for surface combat ships.
- The contract, valued at up to $39M, also includes shipping, installation and transportation fixtures, engineering and field services, inspection and repairs.
Mar. 13, 2015, 7:42 AM
- Following its investor day yesterday, United Technologies (NYSE:UTX) has announced accelerated share buyback agreements with both Goldman Sachs and Morgan Stanley to repurchase an aggregate of $2.65B of common stock.
- The company will make payments of $1.325B to both banks, and will initially receive 9,298,426 shares of its stock from each firm.
- The agreements are part of United Tech's $3B buyback target for 2015.
- SEC Form 8-K
- UTX +0.2% premarket
Mar. 13, 2015, 3:52 AM
- Since the beginning of the year, United Technologies (NYSE:UTX) approached several companies about acquiring Sikorsky, CEO Greg Hayes said at the company's investor meeting yesterday, although it quickly became clear that a sale would be "very hard" due to the unit's heavy tax liability.
- "The business is growing too slowly and is overly dependent on Defense Department contracts," he added.
- United Tech said on Wednesday it was exploring alternatives for Sikorsky, including a potential spinoff.
- Previously: United Tech's Sikorsky asset could be worth $7B-$8.5B, analyst says (Mar. 12 2015)
- Previously: United Tech CEO sheds light on possible Sikorsky spinoff (Mar. 12 2015)
- UTX +0.2% AH
Mar. 12, 2015, 11:33 AM
- Sikorsky Aircraft would be a sought-after property if United Technologies (UTX +2%) follows through with a sale, probably as a tax-free spinoff that could be valued on a stand-alone basis of $7B-$8.5B, or $8-$10/share, Sterne Agee's Peter Arment calculates.
- Citi's Jason Gursky says a deal should be met favorably, Sikorsky is not well aligned with UTX’s vision of being exposed to end markets that will likely benefit from the world’s growing middle class.
- Gursky is looking to Northrop Grumman's (NYSE:NOC) 2011 spinoff of Huntington Ingalls as an example, which led to the levering up of the spinco and the repurchase of the parent company stock.
- Management has put no timeline on the potential alternative outcomes, but Arment expects a conclusion by mid-summer 2015.
Mar. 12, 2015, 8:10 AM
- United Technologies' (NYSE:UTX) chief executive acknowledged that the decision to possibly spin off its Sikorsky Aircraft unit was difficult, but said it would ultimately create value by giving shareholders the choice of owning a helicopter business or owning an aerospace and commercial buildings firm.
- "The issue with Sikorsky here is not that Sikorsky is a bad business. Sikorsky is a great helicopter business," CEO Gregory Hayes told CNBC in a "Squawk Box" interview. "As we think about the portfolio, though, it's really a question of, 'How do you position yourself for above GDP growth, for higher margin into the future?"
- Hayes also noted that Sikorsky's growth will be governed by defense spending and areas of "huge uncertainty."
- Previously: WSJ: United Technologies may spin off Sikorsky Aircraft (Mar. 11 2015)
- UTX +2% premarket
Mar. 11, 2015, 7:16 PM
- The WSJ reports United Technologies (NYSE:UTX) may spin off its Sikorsky Aircraft helicopter unit, and that it might "discuss steps toward a possible spinoff" at tomorrow's investor/analyst meeting.
- Excluding restructuring costs and non-recurring items, Sikorsky had 2014 revenue of $6.62B (+6% Y/Y), and an op. profit of $699M. The business is best known for its Black Hawk helicopters.
- The meeting starts at 1PM ET tomorrow (webcast)
Mar. 11, 2015, 8:26 AM
- United Technologies (NYSE:UTX) is getting it together, writes Peter Arment, Josh Sullivan and Asher Carey in Barron's, saying new CEO Greg Hayes will set a new path that involves portfolio shaping, M&A and more buybacks.
- Sterne Agee rates the stock at Buy with a $140 price target, ahead of its 2015 investor meeting tomorrow.
- UTX +0.2% premarket
Feb. 25, 2015, 7:30 AM
- Sikorsky Aircraft (NYSE:UTX) expects to sell around 400 helicopters in the Middle East over the next five to ten years, roughly as many as it has delivered to the region to date.
- "Expansion of the existing fleet of 400 will be in a proportional manner, and modernization is going to drive that number in the region," said Anand Stanley, vice president and general manager for the Middle East, Turkey and Africa.
- Sikorsky plans to open a regional office in Abu Dhabi, and is opening a new business unit in Saudi Arabia to support military and commercial aircraft.
Feb. 20, 2015, 8:14 AM
- Sikorsky Aircraft (NYSE:UTX) will make India its only assembly location outside of the U.S. for its S-70B Seahawk helicopters if it wins contracts to build more than 120 helicopters from the country, said Samir Mehta, president of Sikorsky’s defense systems department.
- The helicopters may be built either with the Tata Group with whom Sikorsky already has an alliance, or through a new partnership with another Indian company.
Feb. 18, 2015, 2:38 PM
- United Technologies (UTX +0.6%) is exploring international acquisition opportunities of at least $5B that would use the company's "trapped cash" overseas, CEO Greg Hayes says.
- But until deal opportunities arise, UTX will buy back its stock, Hayes says after the company announced last month that it expects to repurchase $3B of its shares this year, although he does not see doing a buyback at $10B or more.
- Hayes sees UTX's portfolio to be split 60-40 between commercial and aero, or vice versa, and that the portfolio should support long-term, double-digit earnings growth.
Feb. 18, 2015, 8:58 AM
- As a step toward providing allied nations with weapons, the U.S. government has established a policy that will permit the widespread export of armed drones for the first time.
- Under the new rules, foreign governments' requests for drones will be examined on a case-by-case basis, while recipient nations must agree to certain "end-use assurances."
- To date, the U.S. has sold its armed drones only to Britain. Unarmed military drones, used primarily for intelligence, have been sold to several countries, including France and Italy.
- The shift in policy comes just days after the FAA proposed rules that would lift some restrictions on drones for commercial use.
- Related stocks: AVAV, NOC, TXT, LMT, LLL, RTN, BA, SAIC, GD, OA, COL, UTX
United Technologies Corporation 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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