With earnings season well underway, investors have now gotten to digest earnings reports from the second quarter in the three major conglomerates. General Electric Co. (NYSE: GE), 3M Company (NYSE: MMM), and United Technologies Corp. (NYSE: UTX) had some very common themes, but they also have unique situations which have changed their outlook and investor bias ahead.

24/7 Wall St. wanted to conduct a review of the reports and the reactions on GE, 3M and United Tech to see which offers the best value ahead. It turns out that there may be a clear winner here this time after value investors filter out the noise.

Additional commentary from each company’s CEO has been added in for an overall flavor of how each company was communicating their results to their respective shareholders.

General Electric

General Electric Co. (NYSE: GE) reported adjusted diluted quarterly earnings per share (EPS) of $0.28 on revenues of $32.75 billion. In the same period a year ago, GE reported EPS of $0.32 on revenues of $32.26 billion. Second-quarter results also compare to the consensus estimates for EPS of $0.28 on revenues of $28.7 billion.

Revenues in the oil and gas segment in the quarter were down 15%, but that was offset by an 8% increase in power and water segment revenues. Overall, industrial segment revenues were flat at $33.09 billion. As a reminder, GE remains in the 24/7 Wall St. 10 Stocks to Own for the Next Decade. This is due to its changes taking place and the desire to move to less and less financial influence over the company. GE’s restructuring and spin-off of Synchrony Financial (NYSE: SYF) keeps it in the special situations classification as of now.

Shares of GE were recently at $25.70 versus a 52-week trading range of $23.41 to $28.68, and this is versus closer to $27 before earnings. The stock has a consensus analyst price target of $30.15, plus GE has the highest conglomerate dividend yield at 3.6% — leaving implied upside of 20%.

3M

3M Co. (NYSE: MMM) reported its second-quarter financial results before the markets opened on Thursday. The company had $2.02 in EPS on $7.7 billion in revenue. That compared to Thomson Reuters consensus estimates of $2.00 in EPS on $7.83 billion. In the same period of the previous year, it posted EPS of $1.91 and $8.13 billion in revenue.

Organic local-currency sales grew 1.8%, and foreign currency translation reduced sales by 7.3% year over year. Operating income margins for the quarter were 23.9%, up 1.1 percentage points from the same period last year.

The company updated its guidance for the 2015 full year. Now 3M expects EPS will be in the range of $7.80 to $8.00, versus a prior range of $7.80 to $8.10, and that foreign currency translation will reduce 2015 sales by 6% to 7%. The consensus estimates are $7.90 in EPS on $31.14 billion in revenue for the 2015 full year.

3M shares were last trading around $149.00 on a 52-week trading range of $130.60 to $170.50, but 3M shares were closer to $155 last week ahead of earnings. The stock has a consensus analyst price target of $168.23, so its 2.7% dividend yield leaves an implied upside of almost 14%.

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United Tech

United Technologies Corp. (NYSE: UTX) acted as though it stubbed its toe after earnings. Despite selling off Sikorsky helicopter unit, shares fell from $110 down to under $100, and the post-earnings reaction was represented as being the worst drop since 2001. Still, UTC is taking aggressive measures to accelerate cost reduction across its businesses and looking for additional structural cost actions that can drive earnings growth well into the future. As a side note United Technologies also mentioned that it will look to deploy additional capital for share repurchases and M&A.

United Tech had $1.81 in EPS on $16.3 billion in revenue compared to consensus estimates of $1.71 in EPS on $16.66 billion in revenue. The same period of the previous year had $1.85 in EPS on $17.19 in revenue.

UTC now expects 2015 operating profit at UTC Aerospace Systems to be down $25 million to $75 million and at Otis to be down $25 million to $75 million at constant currency. Including the adverse impact of FX, United Technologies expects profit at Otis to be down $300 million to $350 million compared to prior year.

Shares of UTC were last seen trading at $99.25, it has a consensus analyst price target of $120.27 and a 52-week trading range of $97.30 to $124.45. This analyst target price rivals GE on upside of close to 20% now, but generally those price targets start falling after such large drops.

24/7 Wall St. also wanted to point out the difference here between the CEO commentary with each earnings report. There is even a difference from company to company on that overall tone.

Jeff Immelt, CEO and Chairman of GE, said:

GE had a strong second quarter, with good industrial organic growth and exceptional cash generation. The environment remains one of slow growth and volatility, particularly in growth markets, while the U.S. is gradually improving. Our industrial businesses had another quarter of strong EPS growth of 18% and orders up 8%. We continue to execute on our plan to exit GE Capital, with $68 billion in dispositions announced this year, and are on track for our goal of closing $100 billion in 2015. We are raising our 2015 Industrial operating EPS guidance to $1.13–1.20, and are confirming GE Capital verticals are on track for EPS of $0.15.

Inge G. Thulin, 3M’s chairman, president and chief executive officer, said:

In the face of a mixed economic environment, the 3M team delivered positive organic growth in all geographic areas while expanding worldwide margins by over a full point. We also continued to invest in our future, including strategic acquisitions. In June, we announced the acquisition of Capital Safety, which will bolster our personal safety platform and build on our fundamental strengths in technology, manufacturing, global capabilities and brand… We are amending our growth outlook slightly to account for lower-than-expected global economic growth. As always, we are focused on executing our plan and improving those factors within our control. I am confident in our team’s ability to generate profitable growth and premium returns into the future.

Gregory Hayes, President and CEO of United Tech, said:

Through the first half of the year, the businesses delivered 3 percent organic sales growth in what continues to be a slow growth global economy.  This solid growth contributed to a 6 percent increase in EPS on a constant currency basis, excluding the impact of gains and restructuring. Continued strength in the U.S. dollar has had a significant adverse impact on our results this year… With six months of trends behind us, it is now clear the commercial aftermarket at UTC Aerospace Systems will be significantly below our expectations for the year. This, along with continuing softness in Otis Europe and a slowing China, led us to reassess our 2015 outlook for UTC Aerospace Systems and Otis. We now expect 2015 operating profit at UTC Aerospace Systems to be down $25 to $75 million and at Otis to be down $25 to $75 million at constant currency. Including the adverse impact of FX, we expect profit at Otis to be down $300 to $350 million compared to prior year… While this revised forecast is disappointing, we remain confident in our long term outlook for the business. We have industry leading franchises, strong recurring revenue streams and have focused our portfolio on attractive end markets… We will accelerate aggressive cost reduction across the businesses and look for additional structural cost actions that can drive earnings growth well into the future. We will also look to deploy additional capital to share repurchase and M&A.

The one common theme this earnings season is that the international growth markets have been weak, and that is on top of just a strong dollar hurting the ability for US companies to export. United Tech looks on the surface to finally offer the same implied upside as GE, but that is because its stock fell by so much. 3M seems to have lost its mojo and no longer looks immune as it had in prior reports. GE still seems primed to be the best conglomerate earnings report if you measure the post-earnings reaction and upside.

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