Honeywell (HON) Tops Q3 EPS by 4c, Revenues Miss; Offers Updated FY18 EPS/Revenue Guidance

October 19, 2018 6:32 AM

Honeywell (NYSE: HON) reported Q3 EPS of $2.03, $0.04 better than the analyst estimate of $1.99. Revenue for the quarter came in at $10.21 billion versus the consensus estimate of $10.75 billion.

"Honeywell continued to build on its strong first-half performance, delivering exceptional results across the board. Organic sales were up 7 percent driven by continued double-digit growth in our warehouse automation business; strong growth across the Aerospace business; demand for Solstice® low global-warming materials and short-cycle Process Solutions software and services; and continued momentum in Homes and ADI global distribution. The increased volumes, coupled with our operational excellence initiatives, drove 70 basis points of segment margin expansion, which is 20 basis points above the high end of our guidance. This resulted in adjusted earnings per share1 of $2.03, up 17 percent year-over-year," said Darius Adamczyk, Chairman and Chief Executive Officer of Honeywell. \"In the third quarter, we generated more than $1.8 billion of adjusted free cash flow2, up 51 percent year-over-year, with conversion of 119 percent. We also repurchased approximately $600 million in Honeywell shares in the third quarter and increased our dividend by 10 percent – the ninth double-digit increase since 2010. Through the third quarter of 2018, we have committed more than $4.5 billion in capital deployment through share repurchases, dividends and acquisitions.

"This has been an exciting year for Honeywell. The portfolio changes we announced at this time last year are nearly complete, and we recently announced the acquisition of Transnorm, a leading provider of warehouse automation solutions with a large and growing installed base and an attractive aftermarket. We are well positioned to deliver strong results in 2019 and are committed to delivering outstanding returns for our shareowners over the long term," Adamczyk concluded.

GUIDANCE:

Honeywell sees FY2018 EPS of $7.95-$8.00, versus the consensus of $8.15. Honeywell sees FY2018 revenue of $41.7-41.8 billion, versus the consensus of $43.38 billion.

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