Honeywell International Inc Cuts Sales Forecast After Mixed Q3 Results

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October 21, 2016 7:51am NYSE:HON

HON logoHoneywell International Inc. (NYSE:HON) this morning posted mixed third quarter earnings and cut its full-year sales outlook, but investors pushed the stock higher in early trading anyway.

The Morris Plains, NJ-based company reported Q3 EPS of $1.67, narrowly missing Wall Street’s view of $1.68. Revenue rose 2% from last year to $9.8 billion, edging out analysts’ $9.79 billion estimate.

Looking ahead, Honeywell reaffirmed its Q4 EPS guidance of $1.74 to $1.78, which straddles Wall Street’s expectations of $1.76. For the full year 2016, the company sees EPS ranging from $6.60 to $6.64 which is in line with analysts’ view of $6.61.

Honeywell also cut its full-year sales outlook to $39.4 to $39.6 billion, down from $40 to $40.6 billion previously. Analysts are looking for $40.65 billion in sales for the year.

HON commented via press release:

“The third-quarter results came in as we outlined on our October 7 conference call. We are well positioned for double-digit earnings growth in the fourth quarter, leading to 8%-9% earnings growth in 2016,” said Honeywell Chairman and CEO Dave Cote. “It was a quarter of important changes in many areas. We split the former Automation and Control Solutions business into two new reporting segments; closed the acquisition of Intelligrated and sold Honeywell Technology Solutions, Inc.; and spun off our Resins and Chemicals business as a freestanding publicly-traded company named AdvanSix Inc. (NYSE: ASIX).

We also funded approximately $250 million in restructuring and other actions from a $0.07 increase in first- and second-quarter EPS caused by an accounting standard adoption, and the $0.14 gain related to the sale of our government services business. These actions will drive more than $175 million of benefits in 2017 alone. We also intend in the fourth quarter to refinance outstanding debt maturing in 2017-2019, which will lower interest expense by approximately $60 million annually beginning in 2017.”

Honeywell shares rose $1.86 (+1.72%) to $110.00 in premarket trading Friday. Prior to today’s report, HON had gained 4.41% year-to-date, putting its performance roughly in line with the S&P 500 during the period.


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