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Diversified conglomerate, United Technologies Corporation UTX is scheduled to report fourth-quarter 2016 results before the opening bell on Jan 25. In the last reported quarter, the company comfortably beat the Zacks Consensus Estimate by 8 cents. On a trailing four-quarter basis, United Technologies boasts an average positive earnings surprise of 5.54%, beating estimates on every occasion.

Let’s see how things are shaping up for this announcement.

Key Factors in the Fourth Quarter

During the quarter, United Technologies' subsidiary Pratt & Whitney secured the joint Type Certification from the Federal Aviation Administration and the European Aviation Safety Agency for its PurePower Geared Turbofan engine in Airbus A321neo aircraft. The two companies have worked together for the past six years, and this certification helps strengthen their ties further. This also helps augment the company’s goodwill and boost its top-line in the upcoming quarter results.

In addition, the company entered into a deal with a popular low-cost Mexican airline company, VivaAerobus. Per the new pact, Pratt & Whitney’s PurePower Geared Turbofan Engine has been used in VivaAerobus’ aircraft A320neo. A320neo made its first passenger flight on Oct 18, 2016 from Monterrey to Guadalajara, Mexico. Pratt & Whitney has secured more than 8,400 Geared Turbofan Engine orders from almost 80 end-users, located across all its business hubs. This product would likely boost United Technologies’ revenues in the to-be-reported quarter.

During the quarter, the company continued to secure various deals across all of its segments which will have a positive impact on its revenues.

On Dec 14, United Technologies reiterated its earlier view for 2016. The company also provided an initial guidance for 2017 based on current business scenario and market expectations. For 2016, the company continues to expect adjusted earnings in the range of $6.55–$6.60 per share on revenues of $57–$58 billion. This represents organic sales growth of 2–3% on a year-over-year basis. The company reaffirmed its acquisition expectations of $1–$2 billion and free cash flow guidance in the range of 90–100%. It also plans to repurchase shares worth $3 billion in 2016. United Technologies stated that its plan to return $22 billion in cash to shareholders from 2015 through 2017 remains on track.

With over 8,000 employees, United Technologies has a considerable presence in the U.K, registering approximately $2 billion in revenues from the region in 2015 out of the overall tally of $56.1 billion. Consequently, the company is susceptible to high operating risks following the Brexit referendum. Fluctuations in foreign currency exchange rates also affect its net investment in foreign subsidiaries and may cause instability in cash flows related to foreign denominated transactions. These undermine its long-term growth to some extent.