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Honeywell’s Management Seeks to Reassure Investors

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Honeywell reports 3Q16 earnings

Honeywell International (HON) released its 3Q16 earnings on October 21. It provided a business update earlier in the month, but there were a few surprises in the release. The company reported adjusted EPS (earnings per share) of $1.60. Excluding a charge of $0.07 deployed for restructuring, the company’s EPS was $1.67. The earnings announcement resulted in a positive price action of 0.75% and the stock closed at $108.96 that day.

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Among its competitors, General Electric (GE) declared its earnings on October 21 as well. The company trimmed its revenue guidance due to weak fundamentals. The stock lost 0.3% of its value after the earnings release. United Technologies (UTX) and Rockwell Collins (COL) are scheduled to declare their earnings on October 25 and October 31, respectively.

Management seeks to reassure investors

Unlike the previous earnings calls, Honeywell’s management sought to reassure investors. The company put out a detailed presentation on how well placed Honeywell is for growth in 2017. The presentation was after David Cote, the company’s CEO, appeared on Jim Cramer’s Mad Money on CNBC. He said that he was astounded by the reaction to the business update provided by the company. He also said that the long-term message appeared to have gotten lost in sight of near-term headwinds. Several of the company’s portfolio actions are expected to be completed in 2016. Emphasis on software (IGV) and long-term opportunities in the solstice program were also highlighted. Currently, Solstice generates around $400 million in annual revenues. Management forecasts peg solstice revenues at $1 billion in 2020.

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