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United Technologies (UTX) Q2 Earnings Top, '18 EPS View Up

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United Technologies Corporation UTX reported better-than-expected results for second-quarter 2018.

Earnings/Revenues

Quarterly adjusted earnings came in at $1.97 per share, surpassing the Zacks Consensus Estimate. The reported figure also came in higher than the year-ago tally of $1.85 per share.

Revenues in the reported quarter came in at $16,705 million, up 9.3% year over year. The top line also outpaced the Zacks Consensus Estimate of $16,264 million. Revenues grew 6% year over year organically.

Segmental Break-Up

Otis revenues in the quarter were $3,344 million, up 6.8% year over year. Aggregate sales of the UTC Climate, Controls & Security segment expanded 6.9% year over year to $5,035 million. The Pratt & Whitney segment’s Q2 revenues came in at $4,736 million, up 16.4% from the year-ago tally. The top-line performance of the UTC Aerospace Systems segment improved 8.8% year over year to $3,962 million.

United Technologies Corporation Price, Consensus and EPS Surprise

 

United Technologies Corporation Price, Consensus and EPS Surprise | United Technologies Corporation Quote

Costs/Margins  

Cost of products and services sold during the quarter was $12,422 million, up 11.3% year over year.

Selling, general and administrative expenses in the second quarter flared up 10.6% year over year to $1,759 million.

Adjusted operating margin the quarter was 14.2%, down 80 basis points from the year-ago figure.

Balance Sheet/Cash Flow

Exiting the second quarter, United Technologies had cash and cash equivalents of $11,068 million, up from $8,985 million recorded as of Dec 21, 2017. Long-term debt stood at $27,246 million, up from $24,989 million recorded at the end of 2017.

During the April-June quarter, the company generated $2,102 million cash from operating activities, down 2.1% year over year. Capital expended was down 16.6% year over year to $372 million.

Outlook

United Technologies has raised its 2018 earnings view to $7.10-$7.25 per share from the prior guidance of $6.95-$7.15 per share. Revenue for the full year are predicted to lie in the $63.5-$64.5 billion range, estimating organic growth rate of 5-6%.

Zacks Rank & Stocks to Consider

United Technologies currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks are listed below:

Hitachi Ltd. HTHIY sports a Zacks Rank of 1 (Strong Buy). The company pulled off an average positive earnings surprise of 51.77%, over the last four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Honeywell International Inc. HON currently carries a Zacks Rank #2 (Buy). The company delivered an average positive earnings surprise of 2.44%, in the trailing four quarters.

Advance Auto Parts, Inc. AAP also has a Zacks Rank of 2. The company came up with an average positive earnings surprise of 9.86%, during the same time frame.

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