United technologies have declared its quarterly results for the quarter ended December 2011. The company has seen an increase of 11 percent on its bottom line. The aerospace business contributed significantly to the growth of the company. Total revenue increased by over 1 percent. The company manufactures elevators, jet engines, heating and cooking equipment for building and other industrial products. The company is also relying heavily on improved allocation towards defense budget by the government.
The company is closing on a significant takeover. The company is in pole position ot acquire Goodrich corp. for a all equity deal while United Technologies’ jet engine division Pratt & Whitney is spending $1.5 billion to buy out Rolls Royce from a joint venture that makes engines for the Airbus A320 plane. These acquisitions will add pressure on the books of the company in the near future. However over a period of three years these deals could improve the top line of the company by over 20 percent year on year. The industry as a whole is on a positive mood as most of the company’s have reported growth of around 12 percent.
For all of 2011, net income was $4.98 billion, or $5.49 per share. That’s up 14 percent from 2010. Revenue for 2011 rose 7 percent to $58.19 billion. The company said that it still expects 2012 profit of $5.80 to $6 per share, with revenue of $59 to $60 billion. Analysts expect earnings of $5.64 per share on revenue of $62.93 billion. The outlook reflects caution about the European economy, as well as prospects for growth in the U.S. and the global aerospace market.
We maintain a buy on the scrip with a time horizon of around twelve months. We would also recommend accumulating the stock on any dips.