According to the law firm press release, United Technologies is a manufacturer and servicer of high-technology products, including aircraft components, elevators, escalators, air-conditioning units, and military-missile systems. The Complaint alleges that during the Class Period, Defendants violated provisions of the Exchange Act by issuing and reaffirming unfounded and inflated earnings guidance, primarily based on the planning assumptions in two of the Company’s key business units: UTC Aerospace Systems (“UTAS”) and Otis Elevator Co. (“Otis”). Defendants’ Class Period representations were materially false and misleading because Defendants failed to disclose or indicate that United Technologies’ earnings forecast relied on planning assumptions for the UTAS and Otis units that were not fully scrutinized and were far too aggressive.
On July 21, 2015, the Company cut its 2015 earnings guidance on the basis of weak performance by the UTAS and Otis units. In reaction to these revelations, UTX stock lost hundreds of millions of dollars in market capitalization, with the Company’s stock price falling from a Class Period high of $119.14 per share on May 14, 2015, to close at $102.71 per share on July 21, 2015.