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Examining 3 Big Industrial Earnings

Smack in the middle of earnings season, few big names this morning:

1) United Technologies1) United Technologies reported earnings and revenues ahead of consensus and affirmed 2011 guidance they gave in December. UTX operates in aerospace, defense, and construction; the key is to watch order trends, and for the most part they were strong.

New equipment orders at Otis elevator were up 11%. Commercial heating ventilation and air conditioning business at their Carrier division is up 21% — that was only up 3% last quarter. And look at the strong showing in the aerospace part of the business, at Hamilton Sundstrand: orders up 31% — only up 13% last quarter. And Commercial spare parts business is up 45% at their Pratt and Whitney division.

Great numbers, particularly considering the weakness in commercial real estate and defense in the U.S. Here's the problem: the stock is way up — the historic high for UTX is $82.50 in 2007 — we are right at the door on that number.

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2) Boeing 2) Boeing is not having a good day: earnings inline, but revenues were light. 2011 guidance of $3.80-$4.00 is surprisingly light; they cited a poor defense environment, the revised 787 schedule, and a pension contribution.

The key here is commercial airplanes, about half their sales: Revenues decreased 11 percent as deliveries of the 777 planes were lighter than expected.

Revenues for the Defense, Space & Security division were also down 5%.

Key issues for the conference call at 10:30am ET: the 787 — they now promise it for the third quarter; what will the production ramp-up look like? And how much are defense cuts going to affect them in 2011.

3) Xerox3) Xerox reported earnings and revenues about in line with expectations, guidance of $1.05-$1.10 for 2011 on the lower end of $1.10 consensus..which is why stock is down 4% pre open.

CFO Lawrence Zimmer will be retiring effective next month.

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