Honeywell (HON) Tops Q2 EPS by 2c, Bumps Outlook

July 21, 2017 6:31 AM

Honeywell (NYSE: HON) reported Q2 EPS of $1.80, $0.02 better than the analyst estimate of $1.78. Revenue for the quarter came in at $10.1 billion versus the consensus estimate of $9.89 billion.

"Honeywell's strong performance continued through the second quarter, with over 3% organic sales growth that exceeded the high end of our guidance range, and 50 basis points of segment margin expansion, resulting in second-quarter earnings per share of $1.80," said Darius Adamczyk, President and Chief Executive Officer of Honeywell. "Earnings came in at the high end of our guidance range, up 10%´╝Ĺ year-over-year. We continued our investments to enhance future profitable growth through new product introductions, additions to the sales organization, and more than $115 million of restructuring funding in the quarter, made possible by a lower-than-planned tax rate. Quarterly free cash flow of $1.2 billion was impacted by the timing of cash tax payments, and our first-half performance remained strong with nearly 40% growth in free cash flow year-over-year."

\"Previous investments in production capacity are driving top-line growth. For example, our newly completed facilities within Performance Materials and Technologies are contributing to double-digit growth for our Solstice® line of low-global-warming products and strong orders, sales, and backlog growth in UOP,\" continued Adamczyk. \"We are also pleased with the continued strength in Aerospace Commercial Aftermarket and in Safety and Productivity Solutions, where we continue to see strong demand for safety products and voice-enabled workflow solutions.\"

"We expect continued momentum in organic sales growth throughout 2017, supported by strong order rates and a growing backlog across many of our businesses," said Adamczyk. "Our focus on delivering organic growth while maintaining productivity rigor and aggressively deploying capital, combined with our efforts to evolve as a world-class software-industrial company, is delivering results for our shareowners."

"We are increasing our full-year reported and organic sales guidance and raising the low end of our full-year earnings guidance by 10 cents. We now anticipate 2017 earnings per share to be between $7.00 and $7.10, up 8%-10%, excluding divestitures, any pension mark-to-market adjustments, and 2016 debt refinancing charges. We also now expect full-year sales to be between $39.3 billion and $40.0 billion, up 2%-4% organic," Adamczyk concluded.

GUIDANCE:

Honeywell sees FY2017 EPS of $7.00-$7.10, versus the consensus of $7.09.

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