United Technologies (UTX) Stock Falls on Light Guidance

NEW YORK (TheStreet) -- Shares of United Technologies (UTX) were falling 2.1% to $111.60 in pre-market trading Friday after the conglomerate guided below analysts' estimates for full year 2015.

At a presentation to investors United Technologies said it expects earnings of $7 to $7.20 a share and revenue of $66 billion to $67 billion for full year 2015. Analysts surveyed by Thomson Reuters expect the company to report earnings of $7.27 a share and revenue of $67.52 billion for full year 2015.

United Technologies said it expects earnings of $6.80 a share and revenue of about $65 billion for full year 2014. Analysts expect earnings of $6.87 a share and revenue of $65.24 billion for the year.

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In an interview with the Wall Street Journal United Technologies CEO Greg Hayes said he is looking for a major acquisition for the company, and is willing to consider changes to its current portfolio.

TheStreet Ratings team rates UNITED TECHNOLOGIES CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate UNITED TECHNOLOGIES CORP (UTX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, increase in net income, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • UTX's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 4.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • UNITED TECHNOLOGIES CORP has improved earnings per share by 31.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNITED TECHNOLOGIES CORP increased its bottom line by earning $6.22 versus $5.35 in the prior year. This year, the market expects an improvement in earnings ($6.85 versus $6.22).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Aerospace & Defense industry average. The net income increased by 29.5% when compared to the same quarter one year prior, rising from $1,432.00 million to $1,854.00 million.
  • Net operating cash flow has increased to $1,948.00 million or 19.21% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -10.22%.
  • The current debt-to-equity ratio, 0.59, is low and is below the industry average, implying that there has been successful management of debt levels. Despite the fact that UTX's debt-to-equity ratio is low, the quick ratio, which is currently 0.67, displays a potential problem in covering short-term cash needs.
  • You can view the full analysis from the report here: UTX Ratings Report

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