Diamonds and Dogs

10/20/15

Robots are taking over the world! Wrong, but your heating, elevators and air conditioning in your office will continue to work with maintenance thanks to today's diamond, United Technologies Corporation (UTX). United Tech is up over 5% after better than expected third-quarter earnings. The company reported an earnings per share(EPS) of $1.67 which is higher than analyst expectations of $1.55. They predict that the full years EPS will be between $6.15 and $6.30 and revenues between $57billion to $58 billion. The big news is a $12billion share buyback which includes $6 billion from the sale of helicopter division, Sikorsky to Lockheed Martin.  United will accelerate most of the buy back over the next 2 years along with more restructurings so earnings may be on the upswing again particularly if China gets their act together.  

Imagine this: Driving down the highway on your hog, wind and sun hitting your face, then BOOM, you nailed a pothole that pops your front tire and you have no spare. Sounds good until you hit that pothole. That's what today's dog has done. Harley-Davidson (HOG) nailed a pot hole with a 15% drop to a 2 year low following horrible quarterly earnings. Domestic sales have not done well due in part to competitors cutting their prices and two recalls causing $32 million in expenses. The strong US dollar has also impacted Harley since it's an unattractive exchange rate. On the bright side, they plan on opening up close to 200 more dealerships by 2020. Hopefully the long term picture remains intact.