What to Expect When Honeywell Reports Q3 on Thursday Morning

Chris Lange

Honeywell International Inc. (NYSE: HON) is scheduled to report its third-quarter financial results before the markets open Thursday. Analysts are calling for $2.01 in earnings per share (EPS) and $9.1 billion in revenue, which compares with $2.03 in EPS and $10.76 billion in revenue posted in the third quarter of 2018.

In September, Honeywell announced a 10% increase in the company’s regular annual cash dividend, taking it to $3.60 per share from $3.28. The company touted its aggressive capital deployment strategy in support of the hike, and this was its 10th double-digit percentage increase since 2010. At the current price, Honeywell yields about 2.20%, and the average of analysts on Wall Street see about 10% upside for the shares. This was one of 11 dividend hikes in September that were too large to ignore.

In the most recent quarter, Honeywell delivered another strong performance of top-line growth, margin expansion and adjusted free cash flow. Organic sales grew 5% led by long-cycle businesses, including U.S. and international defense, business and general aviation, and oil and gas.

At that time, management also noted that the long-cycle backlog was up over 10%, which positioned the company well for the second half of 2019.

Full-year guidance from the second quarter came out as EPS in the range of $7.90 to $8.15 and revenue between $36.5 billion and $37.2 billion. Consensus estimates call for $8.09 in EPS and $36.94 billion in revenue for 2019.

Overall, Honeywell has outperformed the broad markets, with its stock up about 24% year to date. However, in the past 52 weeks the stock is up only 8%.

A few analysts weighed in on Honeywell ahead of the report:

  • JPMorgan has an Overweight rating with a $184 price target.
  • Morgan Stanley has an Overweight rating and a $185 target.
  • Citigroup has a Buy rating with a $197 target price.
  • Cowen has a Buy rating with a $180 target price.
  • RBC’s Buy rating comes with a $177 target price.

Shares of Honeywell traded at $164.20 on Wednesday, in a 52-week range of $123.48 to $178.47. The consensus price target is $182.90.