United TechnologiesUTX

Morningstar Rating

Stock Research and Analysis

by Anil Daka

United Technologies' portfolio boasts an impressive list of holdings. UTC owns pioneer firms such as Otis elevators, Carrier air conditioners, Pratt & Whitney jet engines, and Sikorsky helicopters, which spawned or redefined their industries. These Read more

Bulls Say

Total backlog orders for the firm crossed the $60 billion mark at the start of 2009, indicating a strong order pipeline.

Pratt & Whitney projects its new geared turbofan engines will reduce fuel consumption by 12% and noise levels by 10%, compared with existing comparable engines. Pratt is the sole supplier to the Bombardier C series and Mitsubishi regional jets.

Boeing's BA Dreamliner project is worth a potential $15 billion to UTC's Hamilton Sundstrand division. Demand for the 787 remains high despite economic slowdown.

Sikorsky improved market share over the last four years and is currently the second-largest helicopter manufacturer in the world. Read more

Bears Say

Boeing chose GE GE and Rolls Royce to supply engines for its 787 Dreamliner. This miss could prove costly for Pratt & Whitney in the long run.

United's dependence on U.S. military contracts restricts its flexibility in moving manufacturing to low-cost locations.

Because United Technologies derives around 36% of sales from the U.S. market, a slowing U.S. economy may damp the firm's growth prospects. Read more

Strategy

United Technologies is pursuing growth opportunities through focused expansion in emerging markets such as China and India, where elevator and air conditioner markets hold a lot of potential for growth. Read more

Management

Overall, United Technologies' corporate governance policies are solid, and we think management and the board will act in the best interests of the common shareholder. Louis Chenevert was elected president and CEO of United Technologies in April 2008. Read more

Profile

United Technologies is a $59 billion diversified conglomerate with business operations serving primarily construction and aerospace markets. Otis elevators, Carrier air Read more

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