Yesterday, 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.
Yesterday, 8:18 AM
Thu, Aug. 20, 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.
Thu, Aug. 6, 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.
Mon, Jul. 27, 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.
Fri, Jul. 24, 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%).
Tue, Jul. 21, 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."
Tue, Jul. 21, 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
Tue, Jul. 21, 7:07 AM
Mon, Jul. 20, 5:30 PM
Mon, Jul. 20, 12:49 PM
- Lockheed Martin (LMT +1.9%) hit a "trifecta" today following the announcement of its $9B purchase of Sikorsky Aircraft from United Technologies (UTX -0.7%), according to the analyst team at UBS.
- The deal cements LMT's dominance in weapons making and opens key foreign markets for the company, which has annual revenues of $45B; analysts do not expect antitrust objections since LMT does not build helicopters.
- LMT also announced a strategic review of a large portion of its government IT and services portfolio for a potential sale or spinoff.
- Also, LMT's Q2 results came in well ahead of consensus, with 3% revenue growth well ahead of the UBS forecast for a 6% decline and 12% margins coming in 30 bps better than expected.
- UTX shares also are worth buying, according to Sterne Agee CRT analyst Peter Arment, who says the Sikorsky sale is a "positive first step" in the transformation of its business portfolio and allows the company to return a large amount of cash to shareholders without reducing balance sheet flexibility; while Sikorsky generated ~10% of UTX sales, it only accounted for 6.5% of its profits.
Mon, Jul. 20, 7:54 AM
- Confirming previous reports, Lockheed Martin (NYSE:LMT) has agreed to buy United Technologies' (NYSE:UTX) Sikorsky unit for $9B, adding further heft to its $45B in annual revenues.
- Other players in the industry that were looking into an acquisition/merger, include Textron (NYSE:TXT), Boeing (NYSE:BA) and Airbus (OTCPK:EADSY).
- Lockheed's Q2 results are also scheduled to be released this morning.
- UTX +1.1% premarket
- Previously: Report: Lockheed to buy Sikorsky for over $8B (Jul. 20 2015)
Mon, Jul. 20, 1:42 AM
- Lockheed Martin (NYSE:LMT) has agreed to buy United Technologies' (NYSE:UTX) Sikorsky Aircraft for over $8B, Reuters reports, cementing a deal that would give the Black Hawk helicopter to the maker of the F-35 fighter jet.
- The acquisition of Sikorsky, which had more than 15K employees and net sales of $7.5B at the end of last year, would be the biggest by Lockheed since its $10B takeover of Martin Marietta two decades ago.
- Pentagon officials said last week they would carefully evaluate any sale to maintain competition and avoid market distortions.
Wed, Jul. 15, 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%).
Fri, Jul. 10, 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.
Wed, Jul. 8, 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.
UTX vs. ETF Alternatives
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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