by Ian Harvey
October 23, 2019
Defense contractor, United Technologies Corporation (NYSE:UTX), reported that earnings growth unexpectedly accelerated again in the third quarter and crushed estimates.
“Earnings Predictions” members made potential profits of 101.5%.
Are you missing out on these profits? Why not join us and benefit as well!
Defense contractor, UTX, reported that earnings growth unexpectedly accelerated again in the third quarter. United Technologies stock rose early Tuesday, just clearing a breakout; and the relative strength line is starting to trend up.
Shares of the Dow Jones component rose 2.2% to close at $141.41 on the stock market today, moving above a $139.50 handle buy point.
The stock was up almost 2% in premarket trading, adding to impressive year-to-date gains. United Tech stock is up more than 30% in 2019, better than the comparable gain of the Dow Jones Industrial Average over the same span.
“Earnings Predictions” members entered the options call trade at $2.00, and the price climbed to $4.03 throughout the day; providing potential profit of 101.5%.
The Earnings Results.....
United Technologies earnings per share rose 15% to $2.21 a share, accelerating for a second straight quarter. Revenue climbed 18% to $19.5 billion. Otis sales grew 2.6% to $3.31 billion. Carrier sales dipped 1.2% to $4.82 billion. Pratt & Whitney sales jumped 10.3% to $5.28 billion.
Collins Aerospace sales soared 64% to $6.5 billion, though commercial aftermarket sales saw 20% organic growth.
Equipment orders at Carrier were down 11% organically, while Otis new equipment orders were up 6% at constant currency.
The Recommended Trade on United Technologies.....
Defense contractor, United Technologies Corporation (NYSE:UTX),
will report earnings before the market opens. Analysts expect the company to
report EPS of $2.03, up 5.18% from the prior-year quarter. The consensus
estimate is calling for quarterly revenue of $19.31 billion, up 16.98% from the
The company’s earnings of $2.20 per share topped the Consensus Estimate
of $2.04 by 7.84% in the second quarter.
The company delivered positive earnings surprise in the last four
quarters, with an average beat of 13.2%.
In the past three months, the stock has rallied 4.4% against the
industry’s decline of 4.1%. The stock has soared 29.7% year to date.
The integration by United Technologies of Rockwell Collins, and taking
on the merger with Raytheon has gone better than initially planned, and United
Technologies CEO Greg Hayes has been raising his estimate for the earnings
accretion from the deal through 2019.
At a recent investment conference, Hayes said that the EPS accretion would be "north" of the $0.50 currently forecast -- that's good news for investors and suggests some upward pressure on overall guidance.
Hayes specified that the upgrade to expectations was largely coming from strength in the commercial aerospace aftermarket in the legacy Collins business.
The commercial aftermarket has been an area of real strength in 2019. Management said that second-quarter commercial aftermarket sales in the Collins Aerospace unit were up 16%. There have been concerns that the recent slowing in the economy could filter though into a slowdown in aftermarket sales, but Hayes' recent commentary should give confidence going into the earnings report.
United Technologies is likely to have benefited from strength in its end
markets during the third quarter, owing to the ramp up in military programs,
robust global air traffic, and solid demand for modifications and upgrades,
In addition, the company’s commercial business is likely to have performed
well in the third quarter on account of strong non-residential construction
activity in the United States and solid project awards.
The Previous Option Trade to Consider: Buy the UTX NOV 15 2019 140.000 CALL at approximately $2.00.
This resulted in a 101.5% potential profit for our position within a 48 hours period!
YOU NEED TO BE IN TO PROFIT!
Join us today and see what future trades will be recommended!
After beating Q3 views by 18 cents, management raised its full-year EPS guidance again, to $8.05-$8.15, from $7.90-$8.05. The Wall Street consensus for United Technologies earnings per share was $8.03. The company also narrowed its full-year sales range to $76 billion to $76.5 billion vs. $75.5 billion to $77 billion.
United Technologies will become a defense-and-aviation pure play, after separating its Otis elevator and Carrier air-conditioner businesses and merging with Raytheon (RTN). All three transactions are expected to be completed by 2020.
United Technologies CEO Gregory Hayes noted during the Q3 earnings release, “Our strong performance through the first three quarters gives us confidence in the improved adjusted EPS range of $8.05 to $8.15 and free cash flow range of $5.3 to $5.7 billion for the year.”
Hayes added, “Continued strength at Collins Aerospace, including the integration of Rockwell Collins, and a lower tax rate are expected to more than offset softness we are seeing at Carrier.”
Where to now?
United Technologies aerospace results agree with what Honeywell International (HON) reported last week and this certainly provides traders with confidence that the aerospace business remains strong.
Where to now for United Technologies?
Will we recommend another options trade on United Technologies?
What will “Stock Options Made Easy” advise members to do?
AS ALWAYS THE DECISION IS YOURS!
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!