Honeywell International, Inc.NYSE
Honeywell Appears To Have A Lot To Offer
Stephen Simpson, CFA
Stephen Simpson, CFA
Fri, Oct. 21, 8:58 AM
- Honeywell (NYSE:HON) -0.9% premarket after reporting Q3 earnings that missed analyst estimates and fell for the first time since 2011, hurt by an unexpectedly weak September and a lackluster performance in aerospace.
- HON had dropped 7.5% on Oct. 7 after it cut its sales and profit guidance and pre-announced the Q3 results.
- HON reaffirms guidance for Q4, seeing EPS of $1.74-$1.78, vs. $1.76 analyst consensus estimate, as well as FY 2016, expecting EPS of $6.60-$6.64, vs. $6.61 consensus, on sales of $39.4B-$39.6B vs. prior $40B-$40.6B and $40.65B consensus, with core organic sales declining by 1%-2%.
- "We are well positioned for double-digit earnings growth in [Q4], leading to 8%-9% earnings growth in 2016," Chairman and CEO Dave Cote says.
- HON's Q3 aerospace organic revenue fell 6% to $3.6B due to the impact of sales incentives, weakness in business jets and commercial helicopters, and the completion of space and international defense programs; it expects Q4 sales to slide 7%-9% due to weakness in the business jets, defense and space areas.
Fri, Oct. 21, 6:34 AM
Thu, Oct. 20, 5:30 PM
Fri, Oct. 14, 12:49 PM
- Honeywell (HON +0.6%) is higher after CEO Dave Cote told CNBC last night that he should have provided a more optimistic outlook for the company, while releasing an updated presentation that painted a much brighter picture for the future.
- "I could have done a significantly better job of communicating this story," Cote told Jim Cramer, saying that HON tried to explain the moving parts of the company instead of presenting its prospects in an overall package.
- "I was astounded by the reaction," Cote said about the stock's 7% fall on Oct. 7 in response to what was seen as surprisingly gloomy guidance (I, II).
- The Oct. 7 guidance addressed upfront the weakness in aerospace, but Cote now says that while the business jet market is declining, the commercial, defense and aerospace segments are doing fine.
- HON also indicated in its updated presentation that its oil and gas business bottomed in Q3.
Fri, Oct. 14, 8:06 AM
- Chairman and CEO David Cote appeared on Mad Money last night.
- Link to slide show »
Mon, Oct. 10, 11:25 AM
- Morgan Stanley cuts its stock price target for Honeywell (HON -0.2%) to $124 from $127 but believes the stock remains a top pick, retaining its Overweight rating despite the company's downbeat guidance and concerns over the CEO transition.
- The firm indicates that the management's margin expansion forecast of 45-75 bps is on the conservative side, saying HON could gain 45 bps from restructuring, 20 bps from currency hedging and 30 bps from disposal mix-up and the absence of deal-related expenses.
- At the same time, Goldman Sachs still calls HON a Buy but removes the stock from its Conviction List, citing less conviction in HON's execution following three quarters of EBIT misses while continuing to expect above-average fundamentals.
Sat, Oct. 8, 8:25 AM
- “This is the bottom” for Honeywell's (NYSE:HON) businesses exposed to the oil and gas industries, but troubles in the business jet industry “will get worse” next year, CEO David Cote said Friday, a day after the company cut its earnings and sales forecast, causing shares to slide 7.5% in their worst showing in five years.
- "This was a surprise," says William Blair's Nick Heymann, as HON had been considered a safe-haven stock amid sluggish industrial growth, on Cote's reputation and record of delivering on profit targets.
- Morgan Stanley analyst Nigel Coe compared HON’s announcement to a “paella bowl” dropped in front of investors and said “credibility is becoming a growing issue.”
- Other analysts are more confident: J.P. Morgan's Steve Tusa says "it's not that bad in the grand scheme," noting that HON’s profits are off ~5% YTD, roughly in line with its industrial peers.
- “While this quarter and maybe next quarter look to be a little bit worse than anticipated, we still believe they’re well positioned long term to benefit from growth opportunities," according to Edward Jones' Jeff WIndau.
- HON supplies parts to Textron (NYSE:TXT) and General Dynamics (NYSE:GD), which fell a respective 3.6% and 0.8% yesterday, while aerospace parts makers Heico (NYSE:HEI), B/E Aerospace (NASDAQ:BEAV) and TransDigm (NYSE:TDG) each slid more than 1%; also, GE slipped 0.6%, United Technologies (NYSE:UTX) fell 1.5%, and Boeing (NYSE:BA) lost 0.4%.
Fri, Oct. 7, 9:14 AM
Thu, Oct. 6, 5:42 PM
- Honeywell (NYSE:HON) -3.8% AH after issuing below consensus earnings guidance for Q3, seeing EPS of ~$1.60, or $1.67 excluding a stock compensation restructuring, vs. analysts consensus estimate of $1.70.
- HON also forecasts Q4 EPS of $1.74-$1.78, and full-year EPS of $6.60-$6.64, slightly off its previous forecast of $6.60-$6.70; it expects 2016 core organic sales to fall by 1%-2%, compared with a prior forecast for a 1% decline.
- HON cites lower shipments in its aerospace division, and the separation of its former automation and control solutions business into two new reporting segments.
Thu, Oct. 6, 5:36 PM
Wed, Sep. 14, 10:19 AM
- Sees modest core organic growth in 2H, further runway for margin expansion and attractive returns from M&A.
- Says approximately $25B of balance sheet capacity remains.
- Reaffirms 3Q16 EPS guidance of $1.67-$1.72 (up 6%-10% Y/Y).
- $15B+ deployed since 2015, including ~$8B in acquisitions.
- Presentation available here
Mon, Sep. 12, 12:17 PM
- Honeywell (HON +0.2%) says it will relocate its home technolgoy division headquarters and open a new $19M global software development center in a pair of moves that will add more than 800 jobs to Atlanta; the home technology division is a $9.4B business within HON.
- The new Georgia operation will serve as a development center for software and technologies for HON's aerospace, home and building technologies, safety and productivity solutions, and performance materials and technologies units.
- HON already has more than 1,000 workers in Georgia in various locations, including a cyber security lab.
Wed, Sep. 7, 4:44 PM
- Honeywell (NYSE:HON) says it will pay a spinoff dividend of AdvanSix common shares on Oct. 1.
- HON shareholders will receive one AdvanSix share for every 25 shares of HON stock owned on a pro-rated basis.
- HON expects when-issued trading on the NYSE in AdvanSix will begin on Sept. 14, with regular-way trading beginning Oct. 3 under the symbol ASIX.
Wed, Aug. 31, 10:43 AM
- The period started with an offer to acquire United Technologies. The stock began to rise after CEO Dave Cote said the talks were over due to potential regulatory problems.
- Announced the acquisition of privately held Intelligrated for $1.5B in July.
- Earnings increased by 10% for the second quarter on flat revenues.
- Arranged for the sale of Honeywell Technology Solutions to KBR in August for $300M, looking to shed non-core units.
- It's also considering the spinoff or sale of its commodities chemical unit, worth more than $1B.
- The company is continuing its plan to evolve into a high-tech industrial company and plans on spending a total of $10B on mergers between now and 2018.
Tue, Aug. 30, 7:25 AM
- Honeywell (NYSE:HON) has completed its $1.5B acquisition of Intelligrated, a privately held company focused on supply chain and warehouse automation solutions.
- The business will be integrated into Honeywell Safety and Productivity Solutions and led by Intelligrated's co-founder Chris Cole, who will report directly to Honeywell CEO John Waldron.
Mon, Aug. 29, 3:41 AM
- New rules by the FAA go into effect today, clarifying what is acceptable commercial usage of small unmanned aerial vehicles.
- Drones must weigh less than 55 pounds, fly up to a maximum of 400 feet in altitude, at a speed of no more than 100 miles per hour and can only be operated during the day.
- According to industry estimates, the rules could generate more than $82B for the U.S. economy and create more than 100K new jobs over the next decade.
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