Today, as I was walking the condo campus, I saw an osprey chasing a bald eagle. It was like a WW1 dog fight, aerobatics, offensive and defense maneuvers. Kind of nice to see the food chain in action. The osprey is a better fisherman than an eagle. So, sometimes, the eagle likes to steal a free lunch. God's waiting room is fun.....Kid
semi politically incorrect, If Bernie moves into the White House, it will be the first time that a Jewish family has moved into a house vacated by a black family. Now, I will do penance.
SAO PAULO, May 23 (Reuters) - The first re-engined aircraft in Brazilian planemaker Embraer SA's narrowbody E-Jet family took its first flight on Monday, months ahead of schedule and below the expected weight.The E190-E2, which enters service in 2018, is the first aircraft in Embraer's commercial jet line-up with new wings and Pratt & Whitney engines aimed at improving fuel efficiency
"We are about four or five months ahead of schedule with this flight," said Paulo Cesar Silva, head of commercial aviation at Embraer, in a telephone interview. "The plane flew marvelously well, showing real maturity."
The prototype weighed in "a bit below" its projected weight, said Senior Vice President Luis Carlos Affonso, a rare feat at a phase when planemakers are often battling to shave weight.
The first flight lasted more than three hours, while the prototype tested its maximum velocity and altitude, the executives said.
Embraer is also expanding the size and range of its largest commercial jet, the E195, whose next generation enters service in 2019, posing a direct challenge to the new C Series produced by Canadian rival Bombardier Inc.
Looked at 5 UTC annual reports and discovered that Pratt's operating profits have been unbelievably consistent, $1.8B, $2.0B, $2.0B, $2.0B and $1.6B. I occasionaly play blackjack at the casino, you need a basic understanding of statistical odds to survive. What are the odds of a major league batter having the same batting average in 3 of 5 seasons?, Not good. Some may defend the uncanny repeatable precision of Pratt's profits, but, I am concerned about financial engineering.......Kid
airborne.....Very thoughtful of you, count me in. Maybe a cake sale. Then, we could lay a keel in Taiwan for a nice yacht for Hayes. I'm entering my 16th year of retirement, I have no complaints. My late enrollment penalty for Medicare prescription drugs was tripled for 2016, again, no complaints. I consider myself fortunate...KId
Lost in the back-and-forth over a possible merger of United Technologies Corp. and Honeywell International was a simple fact that should alarm Connecticut: for the first time in its 87-year history as a multicompany corporation, UTC — which perfected the hostile takeover in the 1970s — was in play as the target.And if it happened once, it can happen again. The UTC of 2016 is not the UTC of two years ago; it's significantly smaller.That's a scary thought because, say what you will about UTC moving factory work and executives out of Connecticut, metro Hartford could soon look like Rochester, N.Y., if UTC were to become part of another company.This doesn't mean the Farmington-based corporation, with $56 billion in annual sales and 197,000 employees, 14,000 in Connecticut, is on the block. On the contrary. UTC persuaded Honeywell to please go away. And there are no other suitors out there for a deal that would be the biggest ever in manufacturing.And it doesn't mean the Honeywell merger was close to happening. That combination would never fly, UTC argued, because it would have concentrated too much of the world's airplane systems and components business under one roof. Customers and regulators would never let it come about.Still, Honeywell publicly offered a beefy, 22 percent premium for UTC, and Wall Street thought enough of it to send UTC shares up by half that amount in just a few days. The reality is that in today's anti-regulatory political environment, the merger could probably have sneaked past a weak U.S. Department of Justice if UTC and Honeywell had agreed to sell off a few businesses.That's what UTC and Goodrich did in 2012. And the two biggest UTC-Honeywell aviation customers, Boeing and Airbus, have plenty of market power, thank you very much. Just ask Bombardier, the Canadian company that's struggling to break into the single-aisle aircraft business to compete against the 737 and A320.But the issue here is not whether the merger would have worked. That's a '27 Yankees-vs.-'98 Yankees debate.No, the issue is that there was a serious discussion about it, with UTC as something other than the dominant buyer. The shock that UTC is no longer invincible is partly economic, but also partly historic.Too Big To Merge?UTC was born as an untouchable, unlike, say, General Electric, which started in the 19th century and grew into a powerhouse as electricity became paramount. Soon after its creation as United Aircraft in East Hartford in 1929, the corporation included Pratt & Whitney, which revolutionized airplane engines with its air-cooled, radial WASP models; three aircraft makers, including one run by a fellow named Igor Sikorsky and another by William Boeing; an air service that soon became United Airlines; and two propeller and components makers, Hamilton and Standard.Antitrust regulators broke up United Aircraft in 1934, but even the remaining company was huge as war and civil aviation changed the world.Forty years later, United Aircraft became United Technologies when it added Otis and Carrier to the roster — sealing its fate as too big to merge.Until now. It is, at least, debatable, and that alone is worth noting.Just listen to UTC's CEO, Greg Hayes, in his CNBC interview on the morning after the financial news outlet broke news of the talks. UTC had initiated talks with Honeywell's CEO, David Cote, in April, just as UTC was considering selling Sikorsky. “We met again in May; we met again in July. What became apparent, while no one would argue about the merits of putting these great businesses together, what became very apparent to us is, it just cannot happen.”Everyone focused on that last bit, that it can't happen. But there we have the UTC CEO admitting he initiated talks about a merger that had great merit.It would have been a merger of equals, but with UTC somewhat more equal, we might say. UTC has bigger sales and profits than Honeywell, and it was worth more than Honeywell in the spring of 2015.But a funny thing happened as 2015 progressed. Between Jan. 31, 2015, and Feb. 19, 2016, the last trading day before CNBC broke news of the talks, UTC lost $30 billion in stock market value. Honeywell gained $6 billion. That gave Honeywell the power to come back in early 2016 as the buyer — still in a merger of equals, but this time, the Morris Plains, N.J., company would be the “more equal one.”The reason UTC lost all that market value was largely a fall from grace on Wall Street, as the company missed profit and sales targets throughout 2015 because of well-documented problems, including a slowdown in China affecting Otis. But it was also a choice UTC made. After selling Sikorsky, netting $6 billion-plus after taxes, the company used that money to buy back its shares.In fact, UTC is in the middle of a buyback binge. It will repurchase $22 billion of its own shares between 2015 and 2017. Buybacks are aimed at raising share prices by spreading the same profits among fewer shares, and by showing investors the company has faith in its own shares.Buybacks also have the effect of shrinking a company, compared with the alternatives — reinvesting in its own business, or acquiring other companies, as UTC did in 2012 when it spent $16 billion on Goodrich. In 2000, UTC nearly bought Honeywell for $40 billion, an irony lost on no one these days.Buybacks, in short, are a way of saying, “Here, investors, take back your money; you can put it to better use than we can.”That might be smart financial strategy. But combined with the hit to UTC stock in 2015, along with the fact that Honeywell fared better in 2015 because it's more diversified, that's what brought us to the $90.7 billion Honeywell offer for UTC.Martian GolfSome experts say thinking about a takeover of UTC is pointless.“It's a waste of time to worry about because it's never happening,” said analyst Nicholas Heymann of William Blair & Co., a manufacturing and aerospace analyst. “Can you hit a golf ball from here and get a hole in one on a course in Mars?”UTC has $12 billion in debt, which adds to its total enterprise value and acts as a bulwark against takeovers.Cote said he could hit that golf ball. He argued that the combination would save $3.5 billion a year (much of it likely in central Connecticut, though he didn't say that).Heymann's retort, which Cote no doubt heard from his own advisers: That sounds like a lot of savings, but GE squeezed almost as much as that from its $11 billion investment in Alstom, the power systems company. Instead of seeking a risky merger, Heymann said, Honeywell has ways to increase share value on its own, such as marketing its vast stores of information to help customers operate more efficiently.And so Honeywell retreated. But if Cote tried to hit that golf ball to Mars, someone else could follow. And consider this: Alexion, the New Haven pharmaceutical company, has a market value of $32.5 billion. That's a bit less than half of UTC's total as of Feb. 19 — and UTC is about 20 times bigger than Alexion.What that means is that anything can happen — including, sooner or later, the end of UTC as a freestanding company
airborne,.....I see UTC in a changing landscape. Companies like GOOG and FB, which are relatively young companies, have market capitalizations of $493.B and $303.B, while UTX market cap is $80.B. So, the economic impact of UTX is diminishing. The sale of Sikorsky and share buyback is a form of liquidation and retrenchment, not a goal I would pursue. UTX is still a solid company, but, with less horsepower than in the past. The article also shows the vulnerability of CT to the loss of legacy companies and their jobs.......Kid
Type messageToday, there was a commotion in the condo roadway. Mature ducks were quacking like crazy. I went out and found that a duckling had been run over. Another duckling had gone into a storm drain. What had had happened is that a pack of crows had distracted the parents of 8 ducklings and then proceeded to devour many of the ducklings. Then, a big heron speared another duckling. We lifted the cast iron cover of the drain and plucked the last duckling and released it to the parents. Darwinism at work, sometimes not pretty.....Kid
United Technologies Corp. said Thursday that corporate acquisitions are possible as its chief executive restated the reasons it turned aside an advance by Honeywell International Inc., which sought to buy the Connecticut company for more than $90 billion.Farmington-based UTC said at its annual investor meeting that it expects sales to grow between 5 and 8 percent through 2020 and that its profit estimates for 2016 would remain unchanged.“I wouldn't be afraid to do a big deal,” CEO Greg Hayes said at an investor meeting — adding that it would be more likely in the conglomerate's building systems units than aerospace.UTC is on track to earn $6.30 to $6.60 per share this year, executives said, reiterating earlier guidance. Sales for 2016 are expected to be between $56 billion and $58 billion.“I've never been more optimistic about the future of UTC and our great global franchises,” Hayes said. Global growth is projected to be 3 percent this year and 3.3 percent in 2017, according to the Organization for Economic Cooperation and Development.UTC has been buffeted by slow economic growth in China, which has hurt Otis elevator sales, Europe's faltering economy and a strong U.S. dollar that makes exports more expensive.Hayes again criticized the Honeywell proposal. He repeated the basis of UTC's opposition, that obstacles from regulators and airline customers were “very real.”UTC's geared turbofan engines, which are promoted as quieter and more fuel-efficient than other jet engines, will help drive growth, and UTC does not need to expand its business through mergers and acquisitions, Hayes said.“We have such a great future in front of us today with this organic growth. We don't need to do M&A for growth,” he said.The Morris Plains, N.J., aerospace and building systems company said it sought what it called a “strategic combination” with UTC because it saw value creation for shareholders of both companies. The transaction also could be readily executed “due to two largely complementary business portfolios,” Honeywell said.UTC, which makes jet engines and aerospace components, heating and ventilating equipment, building security systems and other products, is not ruling out buying another company.“We're ready for an acquisition that adds value to our customers,” said David Gitlin, president of UTC Aerospace Systems, which manufactures aerospace parts. “It'll either strengthen an existing product line or add an adjacent product line.”“We don't have to do an acquisition to grow,” he said. “But we will be opportunistic in M&A and we will look for companies that strengthen and complement our portfolio and enable us to add more value to our customers.”Hayes said there are more opportunities to buy companies that fit with UTC's building systems than with is aerospace portfolio. He cited security systems and heating and ventilating companies that could be purchased if the price is right, the business fits with UTC's core enterprises and regulatory hurdles are manageable.Hayes also promised to beef up Otis, which succeeded when Chinese cities were on a building boom, putting up mega-housing units that require elevators, but then faltered as China's economy slowed.“We need to regain share through innovation, through more feet on the streets, through new and innovative products. We need to stem the flow of service margin erosion,” he said.
Honeywell International's unsolicited $90 billion offer for United Technologies was a real boost for the would-be target, refocusing investors in the down-and-out industrial conglomerate away from short-term issues and toward the substantial long-term value contained within its portfolio. In other words, the failed bid has had a halo effect on the erstwhile target.
The February bid came at a difficult time for United Technologies, which in late 2014 had sent CEO Louis Chenevert packing and kicked off a substantial restructuring under his replacement, Gregory Hayes.
In the year following the management shakeup, the company made some substantial moves, most notably selling its Sikorsky Aircraft unit to Lockheed Martin (LMT) for a better-than-expected $9 billion, but its shares had lost about one-third of their value from February 2015 until Honeywell's surprise announcement.
Shares of United Technologies increased by 15% during the final weeks of February, as Honeywell made its very public overture.
And even though Honeywell has walked away from its pursuit of United Technologies, the shot-in-the-arm the bid provided has not worn off. At a current price north of $100 apiece the shares trade higher now than they did during Honeywell's courtship.
That sort of price action might typically suggest that the market thinks a new bid could be forthcoming, but in the case of United Technologies and Honeywell, that appears unlikely. Rather the bid seemingly has reminded the market of what it once saw in United Technologies, upending the focus on the company's near-term headwinds in favor of concentrating on its impressive collection of industrial assets.
United Technologies, which makes everything from Pratt & Whitney engines and Goodrich aerospace components to Otis elevators and Carrier HVAC systems, has been battered by strong dollar concerns, a slowdown in Chinese construction and issues with Pratt & Whitney's highly anticipated new engine design, which have only been partially offset by attempts by Hayes to eliminate higher-cost manufacturing. (The cost-cutting campaign, though a positive for financial results, brought in an unwanted additional spotlight on the company in early February after Republican presidential candidate Donald Trump went after Carrier for its decision to move a production line from Indiana to Mexico.)
United Technologies is also deploying its balance sheet, returning $22 billion to shareholders via dividends and repurchases over three years and seeking out M&A targets. Hayes at the company's recent investor meeting said "I wouldn't be afraid to do a big deal," with aerospace and security two areas believed to be of particular interest.
The company is now projecting 10% annual organic growth through 2020 at Pratt & Whitney and 5% growth in its building divisions. Management sees spare part and aftermarket demand on the rise at a number of its units. Management predicts that United Technologies as a whole should be able to grow revenue at a rate of 5%-to-8% annually in the next five years without any potential M&A boost.
A stronger-than-expected macro recovery or at least stabilization in Chinese demand would generate significant upside to that forecast, as would continued lower oil prices that would be expected to keep older commercial aircraft viable for longer and lead to increased demand for Goodrich replacement parts and spares.While rival bidders for the massive company are probably few and far between, and while Honeywell seems unlikely to return in the near-term, the bid could have also attracted the attention of other deal provocateurs who could help unlock value and boost share price. United Technologies has been mentioned as a potential target for activists after its unwillingness to even engage in talks with Honeywell. An activist could push for significant divestitures or pursue a much-discussed split of the company's aerospace assets from its buildings division.
In the aftermath of the failed Honeywell bid, it seems one thing all sides can agree on is that United Technologies, at $85 per share, was undervalued. It is now up to Greg Hayes and management to prove they can get the most out of that portfolio.
Digressing from UTX, It has been said that "God loves sinners, he made so many of them". An Irish saying, "May you arrive in heaven an hour before the devil knows you're dead". Regards to Zeke. BTW, this weekend, paella, including New Bedford sea scallops, chourico, mussels etc. made by a friend from Valencia, Spain. I may even upscale from Busch beer, Stella Artois is nice. ........Kid
With a major order from Delta Air Lines , Canada’s Bombardier is ready to disrupt the Boeing Airbus ) duopoly, according to a report Tuesday from Moody’s.
Earlier this year, Bombardier scored an order for 75 narrow-body CS100 jets from Delta, with an option for 50 more. It was the largest-ever order for Bombardier’s commercial aircraft business, and Delta is expected to become the biggest C Series customer, Moody’s said.
Delta likely chose the Bombardier jets over Boeing and Airbus models, as Bombardier “has the earliest availability for planes of this type, given the huge backlogs of Boeing and Airbus,” and the Canadian company offered a steep pricing discount.
Bombardier also “likely has the most technically proficient model in this class of aircraft,” focused on the 100-150 seat market. The plane features a new geared turbofan engine from United Technologies’ Pratt & Whitney division that Moody’s says offers a cost advantage over its peers.
Airbus ended 2015 with a backlog of 6,787 aircraft with a total value of $996.3 billion at list prices, beating Boeing for the second straight year. Boeing’s year-end backlog was 5,795 commercial jets, but it didn’t give a list-price value.
Boeing shares fell 0.6% to 126.83 in the stock market today. Airbus jumped 2.5% to 15.57. Delta and United Tech shares were up 1.1% each.
ctb..........Good one, it's like the line in Casablanca, when Captain Renault says: I'm shocked, shocked to find that gambling is going on in here! .....Kid
United Technologies‘ Pratt & Whitney was selected as the engine maker for Northrop Grumman‘s B-21 bomber, the Air Force announced Monday, and the service is OK with Pratt also building the engine for the F-35 fighter.
At a Pentagon briefing Monday, Air Force Secretary Deborah James said Pratt is the new bomber’s engine maker, beating out General Electric‘s aviation division.
James said that there wouldn’t be any issue with the company handling engines for both the B-21 and F-35 and that she was “comfortable with our choices and our strategy.”
Northrop won the B-21 contract, which could be worth $50 billion-$80 billion, for the B-21 back in October, beating out a Boeing –Lockheed Martin team. But until Monday, the Air Force hadn’t disclosed details about the other contractors.
BAE Systems, Orbital ATK , Rockwell Collins , Spirit AeroSystems and GKN Aerospace were selected as subcontractors for the airframe and mission systems.
United Tech shares closed flat in the stock market today. GE lost 0.6%. Northrop shares fell 2.3%. Rockwell dipped 0.7%, Spirit closed down 2.7% and Orbital ATK fell 2.6%.
Boeing shares closed up 1.5% to 122.90. Lockheed shares fell 1.3% to 215.84.
James said there was a “balancing act” in sharing information with the public but also protecting information against cyber and other threats. The information about the subcontractors was released only after the companies had protection plans in place.
“With the B-21 we are leaning forward and trying to be more transparent,” she said.
Lt. Gen. Arnold Bunch, military deputy in Air Force acquisition, said the service would continue to be transparent with Congress about the program after Sen. John McCain threatened to block the bomber as long as it was was procured using a cost-plus contract.
Bunch wouldn’t give contract value or incentive amounts but said he would disclose more information about the bomber as it becomes available.
Honeywell International Inc. announced Tuesday it has abandoned its courtship of United Technologies Corp. and its bid to buy the company for $90 billion, citing the Farmington conglomerate's “unwillingness to engage in negotiations.”The Morris Plains, N.J., aerospace and building systems company said it sought what it called a “strategic combination” because it saw “compelling value creation” for shareholders of both companies. The transaction also could be readily executed “due to two largely complementary business portfolios,” Honeywell said.UTC issued a statement saying Honeywell's decision to drop its pursuit is the “appropriate outcome given the strong regulatory obstacles, negative customer reaction and the potential for a protracted review process that would have destroyed shareholder value.”Honeywell shares jumped 3.5 percent, to $104.98, in afternoon trading as stocks gained overall. UTC shares fell 2.5 percent to $94.25.UTC's statement Tuesday echoed its arguments last week when it went public with its objections to the deal. Chief Executive Officer Greg Hayes said Friday that a regulatory delay, required divestitures and “customer concerns and concessions” would destroy shareholder value.Honeywell said it strongly disagrees with United Technologies' assessment of the regulatory and customer risks.“We remain confident that the regulatory process would not have presented a material obstacle to a transaction,” the company said.“United Technologies felt the same way as we do when they approached us in May 2011and in April 2015,” Honeywell said.When it approached UTC executives Feb. 19, “we had hoped to continue amicable and quiet discussions of a combination,” the company said.“In fact, we were told by them during the meeting that such a combination would be fabulous, they would take it very seriously and they would get back to us with questions within a week in anticipation of their upcoming board meeting,” Honeywell said.Dave Cote, chairman and chief executive of Honeywell, would have headed the combined company with the same titles. He said a merger would be a “great match,” which is why the two companies have been talking about a combination for more than 15 years. Cost savings of $3.5 billion and Honeywell management practices would have created “considerable value,” in a merged company, Honeywell said.The conglomerates compete directly in engine systems, aerospace components and building security systems. Unlike UTC, Honeywell has a presence in oil and gas operations, petrochemicals and biofuels.Honeywell offered $108 a share to buy United Technologies, a 22 percent premium over UTC's closing price Feb. 18. That amounted to a $90.3 billion price tag. Hayes said the proposal “grossly undervalues” UTC and overstates potential cost savings created by the merger.