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United Technologies Corporation Message Board

uacflyer 721 posts  |  Last Activity: Apr 2, 2015 1:52 PM Member since: Jan 9, 2006
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  • Reply to

    UTC changes

    by kidmadeira Apr 2, 2015 8:39 AM
    uacflyer uacflyer Apr 2, 2015 1:52 PM Flag

    But no one wants it! Hayes has said that potential buyers have been approached and were not interested because of the huge tax hit. That leaves a spin off, which would have little if any benefit for UTC. Yet, Hayes sounds as if the decision has been made to unload SA. Since business prospects have never been brighter, perhaps UTC would be willing to absorb a portion of the tax bill. I think there is a 50-50 chance that SA will remain part of UTC. If so, it won't take until the end of the year for Hayes to figure that out and say so.

  • Reply to

    Annual report

    by kidmadeira Mar 30, 2015 3:55 PM
    uacflyer uacflyer Apr 2, 2015 10:01 AM Flag

    kid, no doubt with its backlog a well managed SA has a bright future. And, SA's recent problems are centered around a single program...the totally botched Canadian maritime help...a fixed-price contract that has cost SA/UTC hundreds of millions. That said, Hayes' point is that no matter how well SA is run and how profitable it is, because its business is almost entirely with the U.S. government SA's operating profit margin is limited to about 10%....the govt won't allow a supplier to earn a 15% or 20% on sales. But, that's exactly the profit range of ALL UTC's other business units. So Hayes asks, "why are we in a business that is incapable of matching our other units profit margins no matter what we do? Having said that, I hope UTC retains a well-managed SA. But, in the announcement of SA's leadership change Hayes surely sounded as if he's going to unload SA. He's said the tax burden of a sale is prohibitive. But, what is the value of a spin-off to UTC? Shareholders gain; but UTC does not....it seems to me.

  • Reply to

    Annual report

    by kidmadeira Mar 30, 2015 3:55 PM
    uacflyer uacflyer Mar 31, 2015 7:04 PM Flag

    The report is disappointing....not worthy of UTC. I received GE's report the same day. Comparison is dramatic. Aside from the appearance, the content of UTC's is shallow. The GE chairman's letter is several pages long and goes into the company's strategy, directions and anticipated outcomes in great depth. Haye's brief letter,...well, you read it. Apparently, UTC doesn't think the annual report is especially important.

  • Reply to

    Interest rate

    by want2bik Mar 20, 2015 1:29 PM
    uacflyer uacflyer Mar 20, 2015 5:30 PM Flag

    Thank you, biker. Actually, 3.5% combined with such security is very good. Eventually the Fed will increase rates...and along with that our Income Fund rate will slowly climb. Thanks again.

  • Reply to

    airborne......SIK

    by kidmadeira Mar 14, 2015 1:43 PM
    uacflyer uacflyer Mar 16, 2015 11:38 AM Flag

    I understand those things, kid,. But, they are paper gains. A spin-off doesn't give UTC an extra dollar to use for other purposes...so it seems to me.

  • Reply to

    airborne......SIK

    by kidmadeira Mar 14, 2015 1:43 PM
    uacflyer uacflyer Mar 16, 2015 10:35 AM Flag

    Something I don't understand: If SA were to be sold UTC would get $7-9 billion for other uses, e.g. acquisitions. But, Haye has said that the tax hit would be prohibitive....so a spin-off to shareholders is more likely. Fine. But what does UTC gain from a spin-off? The shareholders wind up owning two companies on a tax-free basis. But, what does UTC gain from a spin-off?

  • Reply to

    GTF in perspective

    by kidmadeira Mar 2, 2015 8:45 PM
    uacflyer uacflyer Mar 6, 2015 5:57 PM Flag

    GE with its CFM class of engines has what appears to be an insurmountable lead over Pratt...although the GTF gets Pratt back in the game in a serious way. However, there is a difference that could be highly significant. For the first time..ever,...two major engine companies have chosen to follow radically different technical paths. The CEO of Embraer said he's never seen anything like it. And, he took his business away from long-time supplier, GE, and switched to Pratt. Think about that. Both Pratt's approach with a gear system and GE's with exotic materials and higher temperature operation may succeed. I hope that's the case. But,....BUT,...if one of these different approaches encounters problems or is demonstrably superior, the impact on the engine business will be profound and will last for decades. For GE, it may lose its dominant position. For Pratt, if the GTF is not successful it will signal the end for P&W as a serious player. Very high stakes, indeed.
    As I've mentioned before, in the wings, RR has selected Pratt's approach for its next class of engine.

  • Reply to

    GTF

    by pqrtw Feb 26, 2015 4:57 PM
    uacflyer uacflyer Mar 1, 2015 10:25 AM Flag

    And still more: Boeing's "Dreamliner" became a nightmare rather than a dream....but the problems were overcome. Nothing man has ever conceived of or built comes close to the complexity of a modern airplane...and at the heart of that complexity is the engine. There will be problems...let's just hope thay are not too dramatic and are manageable.

    Re the gearbox...GE is following a different path, one requiring much higher temperature operation. I hope both engines are successful....but, the GE approach is not without risks.

  • Reply to

    GTF

    by pqrtw Feb 26, 2015 4:57 PM
    uacflyer uacflyer Feb 27, 2015 2:28 PM Flag

    pqrtw.....is your gloomy assessment just opinion...or do you have credible information of some kind...any kind? Pratt has been working on the GTF for nearly 20 years.....it has been tested to death. GE is following a different approach. But, it's noteworthy that the third engine company, RR, which is not involved in the engine battles at the moment,...has opted for a geared turbofan for their next engine. That is, they are following Pratt's approach rather than GE's.

  • Reply to

    Greg Hayes

    by kidmadeira Feb 26, 2015 10:00 AM
    uacflyer uacflyer Feb 26, 2015 4:17 PM Flag

    A company with UTC's sparkling profit margins cannot be too "top heavy" with bloated management. In fact, I think a case can be made that at the very top UTC is dangerously thin. Example? If Hayes had a fatal heart attack tomorrow, who would succeed him? At least when Bellemaire was around one could see that UTC had three top execs capable to taking over, one heading aerospace, another building systems and Hayes. With Chenevert and Bellemaire gone there is only Darnes (sp?), the building & indl systems head. I don't see how the Board can let Hayes carry on for too long absent an obvious line of succession. It's been a very long time since UTC had to go outside for a CEO....decades.

  • uacflyer uacflyer Feb 16, 2015 12:06 PM Flag

    They have been getting rid of "low margin" businesses. That's why the profit margin of Climate, Controls & Security has doubled over the last five years. But, Sikorsky is not an "under performing" business. Indeed, SA is one of the world's most sucessful help companies. Another important factor: Sikorsky sales are only 10% of UTC's business. It hardly matters how profitable SA is so long as its profits margins are solid...which they are.

  • uacflyer uacflyer Feb 16, 2015 10:36 AM Flag

    I think such talk is nonsense. UTC's market cap is well over $100 billion....and about 20% of its business is with the Dept of Defense. Moreover, UTC is highly profitable. Activists won't mess around with a strong company like that having such deep Govt involvement. As for Sikorsky being a drag...more baloney. Almost all of SA's business is with the Government....which explains why its profit margin is not as high as the other UTC companies. And, of course, SA is a UTC legacy company. So, while Hayes says that everything is on the table...I would not take that to mean that UTC has any notion of spinning off SA.

  • Reply to

    New CEO

    by sean4828 Jan 8, 2015 11:37 AM
    uacflyer uacflyer Feb 11, 2015 4:48 PM Flag

    But Hayes was always more than a CFO...he functioned like a COO.

  • Reply to

    dividend increase coming

    by kidmadeira Nov 28, 2014 11:42 AM
    uacflyer uacflyer Feb 3, 2015 12:19 PM Flag

    Dividend-paying companies, incl UTC, usually like to increase dividends in proportion to earnings increases. That makes UTC's 8.5% hike significant and reflects Hayes' attitude toward dividends. It was just a week or so ago that Hayes stated that 2015 earnings would likely be flat, i.e., would NOT increase. Yet, he went for a hefty 8.5% dividend increase. Five percent was what I expected, at most. The 8.5% is certainly a statement of confidence in the future by Hayes. Great!

  • Reply to

    dividend increase coming

    by kidmadeira Nov 28, 2014 11:42 AM
    uacflyer uacflyer Feb 2, 2015 8:00 PM Flag

    I agree...I do owe you an Auggie & Rays hot dog. Good for UTC! Good for us!

  • Reply to

    dividend increase coming

    by kidmadeira Nov 28, 2014 11:42 AM
    uacflyer uacflyer Feb 2, 2015 6:05 PM Flag

    Better than I expected...good for UTX!

  • Reply to

    dividend increase coming

    by kidmadeira Nov 28, 2014 11:42 AM
    uacflyer uacflyer Jan 31, 2015 10:42 AM Flag

    Kid, re GE's well known focus on dividends, you've made my point by mentioning that GE is willing to pay out a significantly higher fraction of its earnings than UTC. So, while UTC has more "runway" to increase its dividend than GE, soon we will learn how much of that runway Hayes is willing to use when UTC's dividend increase is announced...probably next week. I think the increase will not exceed 5%...and will definitely not be 10%. Having said that, I surely hope I am wrong. The UTC dividend means quite a bit to me. Anything over 5% will make me happy. I'll look forward to hearing from you when we have the facts.

  • Reply to

    dividend increase coming

    by kidmadeira Nov 28, 2014 11:42 AM
    uacflyer uacflyer Jan 28, 2015 8:31 AM Flag

    Considering the pressure on UTC due to foreign ex issues...and the sharp reductions in projected earnings, I look for a 5% increasem max, I hope I'm wrong. Whatever it is it may give us a feel for Hayes' attitude re dividends. There is no company more focused on inceasing didvidends than GE....and GE recently increased its dividend by 5%. I look for 5% from UTC.

  • Reply to

    The Frenchmen

    by sean4828 Jan 16, 2015 3:39 PM
    uacflyer uacflyer Jan 17, 2015 10:26 PM Flag

    I have confidence in Hayes...he's a good guy. Nonetheless, I find the turmoil a bit unsettling. The reasons and benefits UTC cited for eliminating the Propulsion & Aeropspace Systems stucture are indentical to those cited when it was first adopted. Bellemare was a Chenevert guy....that's why he's gone, in my opinion. A similar stucture exists on the commercial side of the house, ie., Building & Industrial Systems. I'm betting that Hayes lets that alone.

  • Reply to

    OT flyer

    by kidmadeira Jan 14, 2015 11:18 AM
    uacflyer uacflyer Jan 14, 2015 4:36 PM Flag

    I don't recall ever stating that C is.was a "superb" company....did I? Surely it isn't and never was. Re GE, what I had in mind was GE products and services. Modern life would not be possible without them....and GE makes good stuff, very high tech stuff.....superb stuff. As does UTC.

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