Industrials

Honeywell Earnings Not Enough to Move the Needle

Honeywell Logo
Source: Honeywell International Inc.
Honeywell International Inc. (NYSE: HON) reported fourth-quarter and fiscal year 2013 results before markets opened Friday. For the quarter, the conglomerate posted adjusted diluted earnings per share (EPS) of $1.24 on revenues of $10.39 billion. In the same period a year ago, the company reported EPS of $1.10 on revenues of $9.58 billion. Fourth-quarter results also compare to the Thomson Reuters consensus estimates for EPS of $1.21 and $10.19 billion in revenues.

For the full year, Honeywell posted EPS of $4.97 on revenues of $39.06 billion, compared with EPS of $4.48 on revenues of $37.67 billion in 2012. The consensus estimate called for EPS of $4.95 on revenues of $38.85 billion.

No matter how you look at it, Honeywell has had a great year. When the company reported fiscal year 2012 results last January, the shares hit a new 52-week high of near $70. Shares closed at $89.80 Thursday night and the current 52-week high is $91.56.

The company’s CEO said:

Even in a continued slow-growth environment, our 2013 sales grew 4% and proforma earnings were up 11%, above our guidance, exiting the year with better than expected sales in every business. … While we think it’s prudent to remain cautious on the global economy at this time, we’re increasingly confident in our 2014 outlook based on the momentum from the fourth quarter. And, the benefits from smart gain deployment actions position the Company for strong earnings growth and outperformance over the next 5 years.

The company affirmed the fiscal 2014 guidance it offered in December: sales up 4% to 5%, at $40.3 billion to $40.7 billion and adjusted EPS up 8% to 12% at $5.35 to $5.55.

Honeywell’s highest sales come from its automation and control segment, which posted a gain of 4% in sales and a 60 basis point boost in margins for the full year. For the quarter, however, the segment’s margin was down 20 basis points year over year. The company attributed the drop to “the dilutive impact of acquisitions,” among other things.

Honeywell shares were down about 0.2% in premarket trading Friday, at $89.60 in a 52-week range of $67.95 to $91.56. Thomson Reuters had a consensus analyst price target of around $98.10 before the report. For what it’s worth, the high price target on the stock is $107.

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