United Technologies (UTX) reported better-than-expected fourth-quarter earnings early Tuesday, while fellow Dow Jones component 3M (MMM) missed. United Technologies stock rebounded bullishly Tuesday morning. 3M stock fell sharply.
Industrial giants General Electric (GE) and Honeywell (HON) are due later this week.
United Technologies Earnings
Estimates: United Technologies EPS to drop 5.6% to $1.84 while revenue grows 7.6% to $19.42 billion, according to Zacks Investment Research.
Results: United Technologies earnings fell a fraction to $1.94 per share for the fourth quarter. Sales climbed 8.4% to $19.551 billion.
Otis sales climbed 1.9% to $3.36 billion. Carrier sales slid 2.8% to $4.5 billion. Pratt & Whitney sales rose 1.8% to $5.64 billion. Collins Aerospace sales shot up 31.5% to $6.44 billion.
Outlook: United Technologies declined to give overall 2020 guidance, saying it’ll offer Otis and Carrier guidance in early February and Raytheon (RTN) guidance after the United Technologies-Raytheon merger. United Tech does see its Pratt & Whitney jet engine unit’s sales up mid-single digits. It sees Collins Aerospace sales down in the low single digits, with Boeing 737 Max woes causing some issues.
As of Jan. 27, analysts expected United Technologies earnings per share of $1.94 in Q1 and $8.71 in all of 2020.
United Technologies plans spin off its Otis elevator and Carrier heating and AC units into separately traded companies in April, then close its merger with Raytheon to forge an aerospace and defense giant. The combined company would then The European Union said Monday that it would rule on the United Technologies-Raytheon deal by Feb. 28.
Stock: Shares of the Dow Jones industrial giant rose 1.2% to 152.86 in Tuesday’s stock market trading after initially falling to 148.05. The strong rebound from its 10-week line could signal a new buy area.
The relative strength line for United Technologies stock is lackluster. The RS line, which tracks a stock’s performance vs. the S&P 500 index, is the blue line in the chart provided.
Raytheon, which reports Thursday, was off 0.4%.
Estimates: Analysts expect 3M earnings to fall 9% to $2.10 a share. Sales are seen growing 2% to $8.13 billion.
Results: 3M earnings slid to $2.15 a share adjusted. Revenue climbed 2% to $8.111 billion, ending a four-quarter streak of declining sales. The company will also cut 1,500 jobs in a global restructuring.
Outlook: 3M sees 2020 EPS of $9.30-$9.75. The midpoint is slightly below analyst estimates for 3M earnings per share of $9.60.
3M also said it will cut 1,500 jobs.
Stock: 3M stock, also a Dow Jones Industrial Average component, fell 5.7% to 165.58 Tuesday, diving below both its 50- and 200-day lines. A big laggard among Dow Jones stock in 2019, shares have suffered from China and environmental headwinds.
But while 3M stock had rebounded starting early October, its RS line has gone sideways-to-lower since early November.
United Technologies And Boeing 737 Max Jets
United Tech’s aviation unit has been hit by reports about inflight shutdowns of Pratt & Whitney jet engines on Airbus (EADSY) jets.
The New York Times reported in November that UTC’s Collins Aerospace provided the software blamed in two Boeing (BA) 737 Max crashes and built the jet’s flight deck displays.
Last year, its Rosemount Aerospace business was eyed in faulty angle-of-attack sensors blamed for the deadly crashes.
GE reports early Wednesday and Honeywell follows Friday. General Electric competes with United Tech’s Pratt & Whitney in jet engines.
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