Honeywell Forecasts Stronger Guidance on Aircraft Demand

Published on: 01 Feb, 2019

Honeywell International Inc. (NYSE: HON) reported its fourth quarter financial results on Friday and topped expectations. The Company also provided better-than-expected guidance, causing shares to jump by 2%.

For the fourth quarter, Honeywell reported earnings of USD 1.91 per share on revenue of USD 9.72 Billion. Analysts expected earnings of USD 1.89 per share on revenue of USD 9.70 Billion.

Honeywell’s fourth quarter sales were down 10% year-over-year. However, organic sales were 6% for the quarter, driven primarily by continued growth in its commercial aerospace, U.S. defense, and warehouse automation segments.

Aerospace sales increased by 10% in the quarter, driven by double-digit organic growth in the U.S. and international defense business and business aviation OE, and demand in the air transport and business aviation aftermarket.

Honeywell Building Technologies sales for the quarter increased by 1%, led by demand for commercial fire products and strength in formers Home and ADI Global Distribution business. Performance materials and technologies sales remained flat, while safety and productivity solutions sales increased by 15%.

"We have good momentum exiting 2018 after an exciting year. We continue to transform the portfolio, as we demonstrated with the successful spin-offs of our Homes and Transportation Systems businesses. We now have a simpler, more focused portfolio spread across six attractive end markets with approximately 60 percent of the portfolio growing sales at or above 5 percent organically for the full year. We effectively deployed capital to dividends, capital expenditures, acquisitions, and repurchases of Honeywell shares. Our dividend increase in September marked the ninth consecutive double-digit increase since 2010." said Darius Adamczyk, Chairman and Chief Executive Officer of Honeywell.

For the full year 2019, Honeywell expects sales of USD 36.0 Billion to USD 36.9 Billion, representing at 2% to 5% growth. The Company also expects earnings per share of USD 7.80 to USD 8.10. Refinitiv analysts expects earnings of USD 7.88 per share.

"We have an established software business and strategy in our connected enterprises which continues to grow at double-digit rates as our shift to a software-industrial company continues. We continue to make improvements in our supply chain and working capital to drive better sales, margin and free cash flow; and we have begun the digitization of Honeywell processes to improve organizational efficiency and enable enhanced analytics to drive better decision making. It's an exciting time to be part of Honeywell, and we look forward to continuing our track record of matching our say with our do in 2019," Adamczyk concluded.

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Bryan Shin

Email: Bryan@financialinsiders.com

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