Honeywell’s 1Q17 earnings
Honeywell (HON), the industrial conglomerate, announced its 1Q17 earnings on April 21, 2017. HON reported earnings per share (or EPS) of $1.71 in 1Q17, an increase of 9.6% over 1Q16. HON managed to beat Wall Street analyst consensus estimates of $1.62 per share by a long shot. In this series, we’ll look at HON’s earnings details, its segmental performance, and the latest analyst opinions on the stock.
What pushed HON’s earnings upwards?
Honeywell displayed good control over its cost of goods sold (or COGS). HON’s COGS fell from $6.5 billion in 1Q16 to $6.4 billion in 1Q17. As a percentage of sales, HON’s 1Q17 COGS represented 67% of its revenue, while in 1Q16, HON’s COGS represented 68.7%, a decline of 1.8 percentage points on a year-over-year basis. HON’s share repurchases also helped its earnings per share. During 1Q17, HON purchased 2,575,000 common shares at the cost of $310 million under HON’s $5 billion share repurchase program.
Stock price reaction
Honeywell raises low end of 2017 EPS
After reporting strong earnings, Honeywell raised the low end of its 2017 earnings per share. Now HON expects 2017 full-year EPS to be in the range of $6.90 to $7.10 as against the earlier guidance of $6.85 to $7.10.
Investors can indirectly hold Honeywell by investing in the iShares U.S. Industrials ETF (IYJ), which invests 3.4% of its portfolio in Honeywell as of April 24, 2017.