Honeywell Earnings Are Good Despite Weak Comps

By Chris Lange Updated Jan 12, 12:47PM EST · Published Apr 21, 8:45AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Honeywell Earnings Are Good Despite Weak Comps — © Thinkstock

[cnxvideo id=”625454″ placement=”ros”]Honeywell International Inc. (NYSE: HON) reported its first-quarter financial results before the markets opened on Friday. The company posted $1.66 in earnings per share (EPS) and $9.49 billion in revenue, versus consensus estimates from Thomson Reuters that called for $1.62 in EPS and revenue of $9.32 billion. In the same period of last year, Honeywell said it had EPS of $1.56 and $9.52 billion in revenue.

Overall sales for the first quarter were relatively flat on a reported basis, and up about 2% on an organic basis. The difference between these numbers is the result of the 2016 spin-off of the former Resins and Chemicals business in the Performance Materials segment.

In terms of its business segments Honeywell reported:

Aerospace sales dropped 4% to $3.55 billion, with a profit of $796 million.
Home and Building Technologies reported sales of $2.55 billion, up 3%, with a profit of $389 million.
Performance Materials and Technologies sales fell 9% to 2.07 billion, with a profit of $471 million.
Safety and Productivity Solutions had sales increase 25% to $1.32 billion, with a profit of $194 million.

[nativounit]

As for outlook, the company anticipates that 2017 EPS will be $6.90 to $7.10, up 7% to 10%, excluding divestitures, any pension mark-to-market adjustments and 2016 debt refinancing charges. The consensus estimates are $7.04 in EPS and $39.17 billion in revenue for the 2017 full year.

On the books, Honeywell’s cash, cash equivalents and short-term investments totaled $9.6 billion at the end of the quarter, compared with $9.4 billion at the end of December 2016.

Darius Adamczyk, president and CEO of Honeywell, commented:

Honeywell reported a strong start to 2017, with over 2 percent organic sales growth, 70 basis points of segment margin expansion, and free cash flow of nearly $800 million that was more than six times greater than 2016. Our strong operational performance resulted in reported earnings per share of $1.71. Normalizing for tax, earnings per share was $1.66, or 2 cents above the high-end of our first-quarter guidance and up 11 percent versus last year, excluding divestitures.

Shares of Honeywell closed Thursday up 0.8% at $123.77, with a consensus analyst price target of $134.53 and a 52-week trading range of $105.25 to $127.52. Following the release of the earnings report, the stock was up 2.8% at $127.18 in early trading indications Friday.

[wallst_email_signup]

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.