Honeywell Earnings: Falling Costs Help Margins Expand, Profit Rises

S&P 500 (NYSE:SPY) component Honeywell International Inc. (NYSE:HON) reported net income above Wall Street’s expectations for the third quarter. Honeywell International is a technology and manufacturing company which offers aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers and automotive products.

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Honeywell International Inc. Earnings Cheat Sheet

Results: Net income for Honeywell International Inc. rose to $950 million ($1.20 per share) vs. $862 million ($1.10 per share) in the same quarter a year earlier. This marks a rise of 10.2% from the year-earlier quarter.

Revenue: Rose 0.5% to $9.34 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Honeywell International Inc. beat the mean analyst estimate of $1.14 per share. It fell short of the average revenue estimate of $9.56 billion.

Quoting Management: “Honeywell delivered 2% organic sales growth, strong sales conversion and higher earnings per share in the third quarter,” said Honeywell Chairman and CEO Dave Cote. “Our balanced mix of long- and short-cycle businesses, combined with growth in new products and continued expansion in high growth regions, offset European weakness, lower demand for products in some of our short-cycle businesses in China and the U.S., and foreign exchange headwinds in the quarter. Further, we maintained strong backlogs with new platform wins across a number of our businesses.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the second quarter, by 5 cents in the first quarter, and by one cent in the fourth quarter of the last fiscal year.

Revenue has increased for four consecutive quarters. Revenue increased 3.8% to $9.44 billion in the second quarter. The figure rose 4.5% in the first quarter from the year earlier and climbed 4.8% in the fourth quarter of the last fiscal year from the year-ago quarter.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from $1.22 per share to $1.19, indicating that analysts are growing pessisimistic about the company’s performance next quarter. Over the past three months, the average estimate for the fiscal year has climbed from $4.47 per to share to $4.50.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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