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Global industrial conglomerate United Technologies (UTX - Free United Technologies Stock Report), which is also a Dow-30 component, recently reported June-quarter results that continued to reflect the portfolio flux currently being experienced at the company. Recall, management has already begun to list a number of noncore businesses that are currently on the auction block as discontinued operations. Too, a number of entities were sold during the period. With that, share net from continuing operations came in at $1.58 a share, well ahead of both our and Wall Street's expectations. Revenues on the other hand fell 4.6%, to $13.81 billion, as a slowdown of growth rates in China pinched the top line.

More specifically, UTX has agreed to sell three units of its Hamilton Sunderstrand division to private-equity firms BC Partners and The Carlyle Group. Milton Roy Co., Sullair Corp, and Sundyne Corp, which produce products ranging from rotary-screw compressors to high-speed centrifugal pumps, will fetch $3.46 billion. These proceeds will play an integral role in the company's largest ever acquisition.

Indications from the most recent press release are that UTX's $16.5 billion purchase of aircraft components maker Goodrich has received regulatory approval and should be closing in a matter of days. The aforementioned divestitures were made both to finance this move, and to eliminate any operations that would lead to a hangup in regulatory approval. On that note, we point out that restructurings are rampant as the company undergoes this facelift. Therefore, it appears the investment community is not placing too much stock in the 2012 showing, and instead already has an eye cast toward 2013 when Goodrich is securely under the UTX umbrella.

Coincidentally, management has ramped up its expectations for the cost of this restructuring for the whole of 2012 by $50 million, to $500 million. Workforces will be reduced and field operations are set for a round of consolidation all in the name of lower cost structures in the near future.  This hit on profitability has prompted top brass to reduce this year's earnings-per-share outlook to a range of $5.25 to $5.35. We are in turn moving our call down by a dime, to $5.40. Yes, our figure is still a bit above the parameters provided, but historically leadership has taken a conservative bent and then bested general expectations. We expect a similar scenario as the year winds down. Again, with so many moving parts in the fold, share net predictability is not as elevated as usual for this blue chip.

We are also paring our top-line target by $1.5 billion, to $59 billion. This number is at the peak of the range recently provided by management. Our main concern with regard to revenues is the slowing growth in China’s construction industry. China’s government is attempting to rein in real estate prices in an effort to control higher inflation. This maneuver is adversely affecting the high-end construction field. This is not an ideal backdrop for UTX's Otis division, which designs, manufactures, and sells elevators and escalator systems. The weak euro is also not helping results as it weakens the impact of sales made in that region. On the flip side, a warmer-than-usual summer, particularly here in the states, has buoyed the Carrier HVAC systems business. On a year-over-year basis, revenue gains will be moderate, but as stated we anticipate acceleration in 2013, when the company's newly developing sales muscle can truly be flexed.

From an investment standpoint, we like these shares for a number of reasons. Their quotation has languished in the low-$70 range of late, as investors wait for a clearer picture of what the company will look like once Goodrich is securely on board. From that price, their appreciation potential out to 2015-2017 is ample, and when adding in the stock's generous dividend, the total-return appeal of this top-quality equity is sizable. Getting on board during the early stages of the company's transformation may well pay off handsomely for patient shareholders.

About The Company:United Technologies operates in six business segments. Pratt & Whitney (revenues of $13.4 billion in 2011) makes and services aircraft engines. Otis ($12.4 billion) manufactures and services elevators. Carrier ($12.0 billion) makes heating, ventilating, and air-conditioning equipment. Sikorsky ($7.4 billion) makes helicopters. UTC F&S ($6.9 billion) provides security and fire protection services. Hamilton Sundstrand ($6.2 billion) produces aerospace and industrial products. The company also has a power division dealing in fuel cells. International operations account for nearly half of revenues.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.