United Tech Q3 Earnings: Stellar Performance Leads To Second Upward Guidance Revision

by Trefis Team
United Technologies
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As expected, United Technologies (NYSE: UTX) reported stellar earnings figures this time around driven by superior organic growth and diligent execution of operational plans. Consequently, the company managed to beat both, the earnings and revenue figures, quite comfortably. Organic sales in the quarter jumped by a whopping 6% year-over-year, representing the highest increase in the metric since 2011. All segments except Aerospace had a pivotal role to play in the achievement of this feat.

United Technologies is well positioned for future growth on the back of innovation investments, a robust backlog, and strategic cost-reduction efforts. In general, the company’s diversified business mix, coupled with a wide geographical presence, allows it to remain profitable even when macro economic conditions work against most businesses. At the moment, it seems like there’s no stopping the company.

After a significant struggle, it seems as though things at Pratt & Whitney are finally finding their rhythm. In the quarter, the segment managed to post an organic growth of about 15%. Further, it managed to deliver close to 120 engines in the last three months, a figure that nearly matches the total output for the entire first half. This means that, so far in FY 2017, Pratt has delivered about 254 engines, meaning it is well on track to achieve its previously laid out target of delivering close to 350 to 400 engines over the course of the year.

At Otis, the company managed to deliver organic growth of about 2%, offset heavily by the adverse business environment in China (one of its biggest markets). Despite the negative revenues, over the last few quarters, the segment has worked hard to improve its unit equipment orders in the region. In Q3, unit orders were up a significant 8%, adding further testimony to the rising demand trend in the country. With an improvement in the Chinese economy, we can hope to see sustained growth in demand over the coming quarters.

Additionally, given the amazing performance in the year so far, United Tech has decided to up its guidance a second time. The company now expects revenues to come in the range of $59 billion-$59.5 billion, up from $58.5-$59.5 billion, while earnings come in around $6.58–$6.63 per share, up from the previous range of $6.45-$6.60 per share.

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