Honeywell Earnings Buoyed by Promises of 2017 Improvement
October 21, 2016 by Paul AusickHoneywell International Inc. (NYSE: HON) reported third-quarter 2016 results before markets opened Friday. The conglomerate posted adjusted diluted earnings per share (EPS) of $1.67 on revenues of $9.8 billion. In the same period a year ago, the company reported GAAP EPS of $1.60 on revenues of $9.61 billion. Third-quarter results also compare to the Thomson Reuters consensus estimates for $1.70 in EPS and $9.79 billion in revenues.
On a GAAP basis, third-quarter EPS was flat at $1.60, which excludes $0.07 per share in restructuring charges. Net income for the quarter totaled $1.25 billion, down from $1.28 billion in the same period last year.
The company revised its fiscal 2016 guidance earlier this month. The top end of prior adjusted EPS guidance has been lowered from $6.70 to $6.64 while the low end remained unchanged at $6.60, about 8% to 9% higher than last year. Sales guidance decreased from a range of $40.0 billion to $40.6 billion to a new range of $39.4 billion to $39.6 billion. Operating margin guidance is now approximately 17.6% and free cash flow guidance was lowered from a range of $4.6 billion to $4.8 billion to a new range of $4.2 billion to $4.3 billion.
Honeywell’s chairman and CEO Dave Cote said:
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. … [The] actions [we took] 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.
The company repurchased $233 million in common stock and paid $453 million in dividends during the third quarter.
Honeywell’s shares closed down about 0.1% at $108.14 on Thursday and traded up about 1.8% in premarket trading Friday. The stock’s 52-week range is $93.71 to $120.02. The consensus 12-month price target was $124.06 before the report.
Sponsored: Want to Retire Early? Here’s a Great First Step
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.