United Technologies, a provider of high technology products and services to the building and aerospace industries, posted mixed results for the first quarter of 2016. Revenues inched up 0.3% y-o-y to $13.357 bn and surpassed consensus estimate of $13.034 bn. The marginal increase in sales was primarily due to 2% organic growth during the quarter. Revenues at Pratt & Whitney unit that recently introduced its geared turbofan engine to power airliners including Airbus Group’s A320neo rose 7.7%. At the same time revenues fell 1.1% in the Otis elevator division, mostly due to weakness in China, and declined 1.2% in the aerospace division. Adjusted consolidated operating profit decreased 6.6% to $2.007 bn, and operating margin came in at 15.4% compared with 16.4% in the year-ago quarter. However, adjusted earnings per share improved 2.1% to $1.47 comfortably beating analysts’ average projection of $1.40. Despite a soft economic scenario across the globe, United Technologies reaffirmed its 2016 guidance expecting improved performance in the second half of the year. For 2016, the company expects adjusted earnings to be in the range of $6.30-6.60 per share on revenues of $56-58 bn, with organic sales growth of 1-3%. Free cash flow is forecast in the range of 90-100% of net income attributable to common shareowners. United Technologies also remains focused on increasing shareholder’s return. In 2016, the company plans to spend $3 bn on share repurchases, beyond the repurchases that will be completed in 2016 under the previously announced $6 bn accelerated share buyback program. Besides, in April, the company raised its quarterly dividend by 3.1% to 66 cents per share, which offers a healthy annualized dividend yield of 2.5%. I expect shares of United Technologies to continue to rise, with medium-term target at $115. $UTX, United Technologies Corporation / 1440