With Aerospace Squared Away, Will United Technologies Go Back To Big Deals?
Stephen Simpson, CFA
Stephen Simpson, CFA
Jul. 15, 2015, 12:14 PM
- United Technologies' (UTX -0.5%) Sikorsky Aircraft has been forced to delay the first flight of its largest helicopter until later this year while it completes testing fixes to its gearbox and other problems, the U.S. Navy said yesterday.
- Navy program officials say they have resolved gearbox problems that have contributed to delays in the new CH-53K King Stallion heavy-lift helicopter that was due to fly for the first time in June 2014, but additional testing is still required.
- The Marine Corps plans to buy 200 of the helicopters, a $25B program that accounts for half of Sikorsky’s existing commitments from the Pentagon; military helicopters generate ~70% of Sikorsky’s revenue, and the King Stallion contract is a key attraction for prospective buyers such as Lockheed Martin (LMT -0.2%) and Textron (TXT -1.2%).
Jul. 10, 2015, 3:04 PM
- Lockheed Martin (LMT +1.7%) is in advanced talks to buy the Sikorsky helicopter unit from United Technologies (UTX +1.3%), and an agreement could be reached in the coming days, Dow Jones reports.
- Earlier reports had said Textron (TXT +0.1%) also was a finalist in the bidding for the maker of Black Hawk helicopters.
- At a speculated price of $8B or more, a purchase of Sikorsky would be LMT’s largest since it bought Martin Marietta for ~$10B 20 years ago.
Jul. 8, 2015, 6:43 PM
- Lockheed Martin (NYSE:LMT) and Textron (NYSE:TXT) have emerged as final contenders to buy United Technologies' (NYSE:UTX) Sikorsky Aircraft unit, which could be valued at ~$8B, Reuters reports.
- UTX reportedly is weighing offers from the two companies and may come to a decision by the end of the month, but it still could decide against an outright sale and instead spin off Sikorsky to shareholders in a tax-free deal.
- TXT, whose ~$12B market cap is only one fifth the size of LMT's $60B, is said to have reached out to P-E firms to put together a cash bid.
- Boeing (NYSE:BA), which had expressed interest in a potential deal, is no longer active in the sale process, and Airbus (OTCPK:EADSF, OTCPK:EADSY) is not in the running, according to the report.
- UTX +1.5% AH.
Jun. 17, 2015, 8:04 AM
- Sikorsky Aircraft (NYSE:UTX), which is planning a spin-off or sale, has assured the U.S. Marine Corps that a change in its ownership will not derail its work on the CH-53K, a new heavy-lift helicopter the company is building for the Marines.
- Sikorsky expects the first flight of the newest helicopter before the end of the year, and possibly as early as late October or early November.
Jun. 16, 2015, 12:58 PM
- Airbus (OTCPK:EADSF, OTCPK:EADSY) is keeping an eye on United Technologies' (NYSE:UTX) plan to sell or spin off Sikorsky Aircraft, the president of the plane maker's helicopter unit says without committing to actually making a bid for the business.
- UTX’s decision to ditch Sikorsky comes as business demand for helicopters is under pressure as falling energy prices have led to cost cutting in the oil and gas sector - “The market is a difficult market as we speak,” Faury says.
- Airbus is not the only company possibly interested in Sikorsky, as UTX’s review of the business reportedly also has triggered interest from Boeing (NYSE:BA), Lockheed Martin (NYSE:LMT) and Textron (NYSE:TXT).
- Meanwhile, Faury says Airbus Helicopters is embarking on a two years study for a new heavy-lift helicopter that would emerge next decade.
Jun. 16, 2015, 10:45 AM
Jun. 15, 2015, 7:52 AM
- Many things will be achieved through a Sikorsky spin-off or sale, announced United Tech (NYSE:UTX) at the Paris Airshow, including higher organic growth, improved operating margin, better cash flow generation, increased aftermarket content and lower defense exposure.
- The company sees FY15 EPS (ex-Sikorsky) of $6.35-$6.55, organic sales growth of 3%-5% and free cash flow of 90%-100% of net income attributable to common shareholders.
- Previously: UTC establishes date for Sikorsky decision (Jun. 15 2015)
Jun. 15, 2015, 3:25 AM
- Putting a timeline on its helicopter exit, United Technologies (NYSE:UTX) has announced it will decide on spinning off or selling its Sikorsky Aircraft business by the end of the third quarter.
- "Separation of Sikorsky from the portfolio will allow both United Technologies and Sikorsky to better focus on their core businesses," said CEO Gregory Hayes.
- Previously: UTC reviewing Sikorsky options after offers (Jun. 10 2015)
Jun. 10, 2015, 2:16 PM
- United Technologies (NYSE:UTX) declares $0.64/share quarterly dividend, in line with previous.
- Forward yield 2.17%
- Payable Sept. 10; for shareholders of record Aug. 14; ex-div Aug. 12.
Jun. 10, 2015, 2:38 AM
- After receiving several offers, United Technologies' (NYSE:UTX) board of directors is scheduled to meet later this week to review the options for its $8B Sikorsky aircraft business.
- UTC is considering two tax-efficient transactions for Sikorsky: a spin-off or combination with peer Textron (NYSE:TXT).
- Alternatively, Sikorsky may be sold outright to another company. Lockheed Martin (NYSE:LMT), Boeing (NYSE:BA) and Airbus (OTCPK:EADSY) have all expressed interest.
Jun. 8, 2015, 9:02 AM
- Airbus (OTCPK:EADSY) is "watching with interest" to see whether United Technologies (NYSE:UTX) puts its Sikorsky helicopter business up for sale, Allan McArtor, the head of Airbus' U.S. division, told Reuters.
- UTC expects to make a decision on whether the conglomerate will divest Sikorsky in a couple of months.
Jun. 2, 2015, 3:09 PM
- United Technologies' (UTX +0.2%) Sikorsky Aircraft says it is cutting 1,400 jobs in the next year, ~9.2% of its global workforce of 15,200 people, amid declining demand for helicopters to shuttle workers to offshore oil platforms.
- Employee and contract positions will be eliminated in Connecticut, Pennsylvania and Poland, and the company also will consolidate some manufacturing operations.
- Sikorsky says the cuts are not related to a review by UTX of whether to sell, spin off or divest the helicopter manufacturer; a decision is expected to be announced in about a month.
May 28, 2015, 2:54 PM
- Airbus (OTCPK:EADSF, OTCPK:EADSY) says it has encountered delays in flight trials of its new A320neo single-aisle jet because of a problem on one of the engines, although the program remains on track for its first plane delivery this year.
- Flight testing is on hold for the A320neo, powered by PW1100G engines from Pratt & Whitney (NYSE:UTX), but the delay should last only a matter of days, says the head of programs for Airbus' commercial jetliner unit; Pratt & Whitney says it understands the nature of the problem and is addressing it.
- Meeting its planned launch schedule is seen as critical for Airbus, which is battling Boeing (NYSE:BA) to win new orders in the key market of narrow-body aircraft.
- Earlier: Airbus looks to ramp up A320 production
May 27, 2015, 3:42 PM
- Lockheed Martin (LMT +0.4%) CEO Marillyn Hewson says the company is open to making large deals but declines to comment specifically on whether it is interested in buying all or part of United Technologies' (UTX +0.8%) Sikorsky Aircraft.
- “We have great debt capacity,” the CEO says, adding that the company remains committed to returning most of its free cash to shareholders over the next three years.
- LMT, Boeing (NYSE:BA) and Airbus (OTCPK:EADSF, OTCPK:EADSY) are among the companies said to be exploring bids for Sikorsky or perhaps for a minority stake; LMT already is a partner with Sikorsky on programs including a planned new rescue helicopter for the Air Force and the replacement for the rotorcraft used as Marine One by the U.S. president.
May 22, 2015, 9:20 AM
- The U.S. State Department has approved the sale of 10 Sikorsky (NYSE:UTX) MH-60R Seahawk helicopters to Saudi Arabia for $1.9B, authorizing a sale which had been discussed for years.
- The Saudi government had requested a sale of the helicopters, as well as radars, missiles and other equipment.
- UTX +0.3% premarket
May 21, 2015, 9:30 AM
- Alongside Goldman's list of 50 stocks appearing most as top holdings at hedge funds is its list of the 50 top shorts.
- New additions this quarter: Baxter Intl (NYSE:BAX), UPS, Marriott (NASDAQ:MAR), NextEra (NYSE:NEE), Ford (NYSE:F), National Oilwell Varco (NYSE:NOV), McDonald's (NYSE:MCD), M&T Bank (NYSE:MTB), CenturyLink (NYSE:CTL), Amgen (NASDAQ:AMGN), Pioneer Natural (NYSE:PXD), Duke Energy (NYSE:DUK), Seagate (NASDAQ:STX), AbbVie (NYSE:ABBV), Cisco (NASDAQ:CSCO).
- The full list (in order of $ value of short interest): AT&T (NYSE:T), Disney (NYSE:DIS), IBM, Verizon (NYSE:VZ), Intel (NASDAQ:INTC), Kinder Morgan (NYSE:KMI), Exxon (NYSE:XOM), Pfizer (NYSE:PFE), J&J (NYSE:JNJ), Deere (NYSE:DE), Caterpillar (NYSE:CAT), Exelon (NYSE:EXC), GE, Boeing (NYSE:BA), Halliburton (NYSE:HAL), Fox (NASDAQ:FOXA), Comcast (NASDAQ:CMCSA), UTX, Regeneron (NASDAQ:REGN), Merck (NYSE:MRK), salesforce.com (NYSE:CRM), AbbVie (ABBV), Conoco (NYSE:COP), Wal-Mart (NYSE:WMT), Eli Lilly (NYSE:LLY), Celgene (NASDAQ:CELG), Schlumberger (NYSE:SLB), AutoZone (NYSE:AZO), Wells Fargo (NYSE:WFC), Emerson (NYSE:EMR), McDonald's (MCD), Reynolds (NYSE:RAI), Target (NYSE:TGT), Accenture (NYSE:ACN), Coca-Cola (NYSE:KO).
United Technologies Corp. provides products and services to the building systems and aerospace industries worldwide. The company operates through five business segments: Otis, UTC Climate, Controls & Security, Pratt & Whitney, UTC Aerospace Systems, and Sikorsky. The Otis segment designs,... More
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