United Technologies, a provider of high technology products and services to the building and aerospace industries, recently announced solid financials for the fourth quarter of 2014. Revenues edged up 1.4% y-o-y to $17 bn, in line with expectations, with organic growth of 4% being partially offset by currency translation effects. The improvement was driven by a 10% jump in Sikorsky sales while revenues in Otis and Climate Controls & Security were relatively flat year over year. Operating income rose 10.3% y-o-y to $2.57 bn, and operating margin climbed 120 basis points to 15.1%. Adjusted earnings per share came in at $1.88, up 13% y-o-y and slightly above consensus estimate. United Technologies continues to maintain a strong cash position. At year-end 2014, cash and cash equivalents were $5.23 bn with long-term debt of $17.87 bn compared with respective tallies of $4.62 bn and $19.74 bn in 2013. In 2014, the company generated cash flow from operations of $7.3 bn and spent $1.7 bn on capital expenditures and $1.5 bn on share buyback. In February, the company raised its quarterly dividend by 8.5% to 64 cents per share, which implies indicated dividend yield of 2%. At year-end 2014, new equipment orders at Otis were up 12% from the year-earlier quarter, driven by growth in North America. Climate, Controls & Security equipment orders increased 11% organically. Commercial spares orders increased 5% at Aerospace Systems, while Commercial aftermarket sales were down 6% at Pratt & Whitney. In 2015, United Technologies plans to earn $6.85-7.05 per share on revenues of $65-66 bn. The company expects to invest $1.7 bn in capital expenditures in 2015, and continues to estimate cash flow from operations less capital expenditures in the range of 90-100% of net income. The company also expects share repurchase of $3 bn and acquisitions of approximately $1 bn in 2015. I believe that United Technologies’ shares are attractive for medium-term investment. Target price is $130. $UTX, United Technologies / 1440