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United Technologies Corporation: Company Strategy & Performance Analysis

United Technologies Corporation: Company Strategy & Performance Analysis

Summary

United Technologies Corp (UTC) provides high-technology products and services to the building systems and aerospace industries. The company has organized its business operations into four divisions: UTC Aerospace Systems; Pratt and Whitney; UTC Climate, Controls and Security; and Otis. The Otis division manufactures elevators and escalators; Pratt and Whitney build commercial, general aviation and military aircraft engines; UTC Climate, Controls & Security provides heating, ventilation, air conditioning and refrigeration solutions.

MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading MRO companies. The report details company operations in key geographies and offers a comprehensive analysis of each firm’s growth strategy and financial performance. The reports benchmark company performance via key indicators, including order, order backlog, operating expense, operating income, net income, and MRO revenue.

Key Highlights

Increase in government-funded and non-funded contracts

The company’s order backlog posted a compound annual growth rate (CAGR) of 6.9%, rising from US$71.5 billion in 2012 to US$93.3 billion in 2016 due in part to an increase in volume of government funded and unfunded contracts received. The order backlog of the Pratt and Whitney division posted an annual increase of 9.1%, rising from US$43.6 billion in 2012 to US$61.8 billion in 2016.

UTC ranks second in terms of MRO revenue

UTC registered an annual growth rate of 10.6%, from US$9.0 billion in 2015 to US$10.0 billion in 2016 after GE aviation which registered an annual growth rate of 12.9%, from US$10.1 billion in 2015 to US$11.4 billion in 2016. The increase in UTC’s MRO revenue is mainly due to the implementation of innovative solutions and cost reduction strategies to support the growth of operating revenue across its major contributing business divisions. In addition, high commercial aftermarket sales at Pratt & Whitney and UTC Aerospace Systems positively contributed to the growth in net sales.

Robust R&D capacity to strengthen the firm’s product portfolio

UTC invests a significant amount of its total revenue in R&D activities to strengthen its competitive position in the market. The company’s annual expenditure on R&D is variable. In 2015, UTC reported a 2.5% increase in its R&D expenditure, from US$2.27 billion in 2015 to US$2.33 billion in 2016. The company’s majorly R&D investments are in aerospace and engine production at Pratt & Whitney, and the Mitsubishi Regional Jet, Airbus A320neo, and Airbus A350 programs at UTC Aerospace Systems.

Scope

  • Company Snapshot - Details key indicators and rankings of UTC in terms of revenue, net income, and operating income.
  • Company SWOT Analysis - Outlines UTC’s strengths, weaknesses, and opportunities and threats facing the company.
  • Growth Strategies - Provides an overview of UTC’s corporate goals and strategic initiatives and evaluates their outcomes.
  • Company Performance and Competitive Landscape - Analyses the company’s performance by geographical segment and provides a peer comparison on parameters such as revenue and market share.
  • Key Developments - Showcases UTC’s recent corporate events and initiatives.
  • ICT Spending Prediction - Details how the company allocates its ICT budget across the core areas of its business, specifically hardware, software, IT services, communications and consulting.
Reasons to buy
  • How does UTC rank among its peers in terms of revenue and market share?
  • What are UTC’s main growth strategies and how successful has the company been at implementing them?
  • How has the company performed since 2014?
  • How has UTC performed in comparison to its main competitors?
  • What are UTC ’s strengths and weaknesses and what opportunities and threats does it face?


Company Snapshot
Company SWOT Analysis
Growth Strategies
Company Performance
Competitive Landscape
Deals
Key Developments
ICT Spending Predictions
Financial Summary
Appendix

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