UTX is a sitting duck. Poor management team, has no vision, it could do so much better under someone else. The inept Board is not going to change the management, so someone should make a hostile offer and takeover the company.
flyer,.......By deduction, from your posts, I've concluded that you're retired from Pratt, still love those +/- ten thousandths tolerances on engine parts, are drawing the MRD from the 401-K, live in Manchester, but, not a tree street....they're not very nice. We my have met at some time, I'm sure we would both remember the privilege. Just did my 5th GOOGL trade in 6 calendar days, I guess I'm not an "investor", but, the IRS likes my trading action. The CT DRS no longer shares in the proceeds.....Kid
flyer,......You may be having a senior moment. In Roman times, when a messenger brought back bad news from battle fronts, etc., they would punish the messenger by running a sword through him. My post is a synopsis of an article from today's Hartford Courant. using the exact wording from the Courant. Another cool thing that was done by the Romans was to line up the Roman soldiers after a losing battle and run a sword through every 10th soldier in the lineup, hence, the term decimation. This was to boost morale and incentivize the soldiers to do better....... I think Mr. Hayes is going to be doing some decimation.....Kid
Another thing to keep in mind is that the aftermarket business model has changed--dramatically. PW stated yesterday that 80% of GTF engine sales are under "fleet management programs". From what I understand, there are two basic types--pay as you go and pay at shop visit. With the latter, the customer pays for future overhaul as flight hours are accumulated, but before the shop visit actually occurs. This benefits both the customer and PW since the customer has a continuous, predictable cash outlay and PW doesn't have to wait 10 years before it sees any cash flow from the engine sale. I don't know what percentage of the maintenance plans are of this type, but it seems likely that they have the potential to mitigate some of the near-term negative margin issues by pulling maintenance cash flow forward.
This has nothing to do about management. It is all about the business model. Doesn't matter who runs the company. The majority of UTX business is oversea. Europe and China are a mess now. The dollar will continue to get stronger and UTX earnings will get weaker. Doesn't matter who runs the company. If the Fed raises interest rates as it has said it will do things will get worse. This bull has run a long time and now it is time to give some back. Notice how oil and all the other commodities are coming down. That is because things are slowing. Don't think you have seen anything yet. If I am right come September and October you will see some real pain. KID will be the only one making money then unless you are in fixed income.
Kid, occasionally you're thinking is a tad shallow. Pratt is entering one of the most significant periods in its history. As you point out, profit in the engine business comes entirely from aftermarket sales. And the most critical issue of aftermarket sales is the installed engine base. Pratt's installed base peaked about 30 years ago and has been in decline ever since...reflecting primarily the dominance of the Boeing/GE 737 for which Pratt is not involved...as well as the dominance of GE and RR in the very large engine category ( 100,000 lbs thrust) for which there is no Pratt engine. Because Pratt's legacy engines have been removed from service over the decades, the installed base so vital for aftermarket sales has been steady, long-term decline. But, the decline in Pratt's installed base ends its decade-long decline this year and begins to climb for the first time in decades in 2016. This is not merely a projection; but is based on orders in hand for Pratt's new GTF class of engines. Indeed, Pratt projects a sales volume of $20 billion in five years, up from $14 billion in 2014. Accordingly, in the 2020s and beyond Pratt's highly profitable aftermarket sales will increase dramatically. Being close to Pratt, you know all this. But, for those that view the long term as what happens this afternoon, things like this don't matter at all. For "investors" it matters plenty.
Maybe because they do not see any great future in the rotor business. Oil companies are hurting and defense is being cut. Less troops to carry = less aircraft needed. The defense cuts will continue if we have a dumbocrat in the White House. The liberals have control. Buckle up!
Pratt sales were up 2 percent during the second quarter, which Hayes called "nothing to write home about."
Pratt's operating profit of $487 million fell 6 percent compared to a year ago, because of pension costs and more money-losing new engine sales. Engine manufacturers make their profits on engines in the years they're flying, with repairs and service contracts. That commercial aftermarket segment was up only 1
Steve, a company that is "grossly mismanaged" does not report the outstanding profit margins UTC reported yesterday for every one of its businesses. The issue was sales falling well below projections. Do you get that? Much of that was due to foreign exchange. Some was do to a softening Chinese economy. UTC management cannot control those things...no management can. The very poor forecast of aerospace systems sales was a real gaff for which management deserves all the criticism it has received. Further, as Jet has pointed out, UTX at $125 was priced way above its historical PE of 15. UTX coming down to earth at about $100 is far more realistic than pie-in-the-sky $125. Nonethless, what happened yesterday is painful, indeed. But, to suggest that UTC is poorly managed is way, way over the top. UTC makes stuff the world cannot live without..and at a very good profit margins. The headwinds being faced now are significant and reflect a weak global economy and a strong dollar. The latter issue is likely to worsen as interest rates rise. What do you suggest UTC management should do about that?
Hayes has a four year Bachelor degree in accounting and he's in charge of one of the biggest company's in the world ? The board is losing control and some of them will be replaced also. With new management they could right the ship in a couple of years. But for now they are not a well run company and wall street is going to take notice
We would readily welcome you! If you have the talent you would be hired unlike current american engineer. I am from India originally and have adapted well here.