UTC Q1 2016 Earnings Review: Results Beat Consensus Estimates; Revenue And Earnings Up Year-Over-Year
United Technologies (NYSE: UTX) released results for Q1 2016 recently. In terms of net adjusted income, the company posted EPS of $1.47, beating the consensus analyst estimate by a comfortable 8 cents. Revenues came in at $13.5 billion and was primarily driven by 2% organic growth in the quarter. Volatile foreign currency headwinds led to adverse impacts on the revenues of most segments. However, Pratt & Whitney outperformed this quarter with plants in Connecticut and Florida reporting strongest first quarter output in military and commercial jet engines in more than 10 years.
Despite a slow growing economy, the company reaffirmed its EPS guidance range of $6.30 to $6.60 for 2016.
Highlights from the quarter:
- The company has decided to repurchase $3 billion shares this year in addition to an accelerated repurchase program of $6 billion announced previously. UTC also increased its dividend to 66 cents a share earlier this week.
- UTC’s quarterly results were negatively affected by inventory buildup in advance of an increase in ramping aerospace programs. This includes large expected orders at Pratt & Whitney for military and commercial aircraft engines.
- A payment of $237 million to the Canadian Government related to Pratt & Whitney Canada’s research and development investment pact also had a negative impact on the results this time around. The deal calls for Pratt Canada to spend $1 billion on its Canadian operations over four years, in return for tax incentives and other aid from Canadian government agencies.
- Otis equipment orders increased by 1% year over year despite a slow growing economy. However, equipment orders at UTC Climate, Controls & Security decreased by 8 percent. This was primarily due to a decline in the Carrier’s refrigeration business.
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