iShares US Industrials

Honeywell kicked off industrials earnings season, beating estimates. With Boeing, Caterpillar, 3M, GE, and more reporting soon, here’s what to expect.

Among the analysts tracking 3M, 32% recommended a “buy,” 47% recommended a “hold,” and 21% recommended a “sell.”

Boeing (BA) has always tried to enhance shareholders’ wealth through dividend payments and share buybacks.

Among the analysts tracking 3M, 39% recommended a “buy,” 39% recommended a “hold,” and 22% recommended a “sell.”

Goldman Sachs’ (GS) chief equity strategist, David Kostin, expects the S&P 500 (SPY) to reach 3,000 by the end of 2019.

General Electric’s (GE) Power, Transportation, and Lighting divisions have been struggling for years.

Among the 21 analysts tracking Illinois Tool Works stock, 19% recommended a “buy,” 67% recommended a “hold,” and 5% recommended a “sell.”

Last month, Goldman Sachs predicted the S&P 500 (SPY) will reach 3,000 by the end of 2019.

On December 13, General Electric (GE) announced that it will spin off its digital assets and build an independent company.

General Electric’s (GE) Healthcare segment is one of the company’s better-performing units.

Apart from the power business, General Electric’s (GE) Transportation and Legacy segment’s lighting division has also struggled for years.

BNSF Railway (BRK.B) reported a 3.1% YoY increase in its rail traffic volume in week 47 due to strong carload traffic growth.

For 3M stock, 37% of the analysts recommended a “buy,” 42% recommended a “hold,” and 21% recommended a “sell.”

General Electric’s Healthcare segment is one of the company’s better-performing units and is the fourth-largest contributor to its total revenue.

Yesterday, General Electric announced it agreed to sell its Current lighting division to private equity firm American Industrial Partners.

Cummins (CMI) reported its third-quarter earnings today before the markets opened. The engine manufacturer (IYJ) beat Thomson Reuters’ adjusted EPS estimate by a wide margin.

UPS’s operating profit declined 4.7% to $1.7 billion in the third quarter from $1.8 billion in the third quarter of 2017.

Norfolk Southern (NSC) announced its Q3 earnings this morning. NSC’s adjusted EPS of $2.52 beat the analysts’ estimate of $2.44 by 3.1%.

Caterpillar’s (CAT) Energy and Transportation segment accounted for 41.1% of total revenues in the third quarter.

The latest report on September 28 suggests that Honeywell’s short interest remained under 1% of the outstanding shares.

Analysts’ consensus on 3M indicates a target price of $211.50, which implies a marginal gain of 0.5% over the closing price as of October 9.

Railroads’ capital expenditure is based on their revenue.

Among the 17 analysts tracking 3M, 30% recommended a “buy,” 47% recommended a “hold,” and 23% recommended a “sell.”

On September 20, General Electric announced the release of the new Predix ServiceMax Field Service Management solution.

General Electric’s (GE) Power Services business launched the world’s first 6B Repowering Solution on September 12.

The latest short interest report on August 31 indicates that Caterpillar’s short interest declined compared to its previous report two weeks ago.

FedEx’s adjusted operating margin contracted by ten basis points to 7% in Q1 2019 from 7.1% in the first quarter of 2018.

In the first half of 2018, General Electric (GE) paid $2.1 billion cash in the form of quarterly cash dividends.

Of the 14 analysts covering EXPD stock, ten of them have recommended a “hold,” and one has recommended a “buy.”

Expeditors International of Washington (EXPD) beat analysts’ adjusted EPS estimate of $0.78 by $0.01 for the second quarter.

Caterpillar’s (CAT) Energy and Transportation segment contributed a revenue share of 40.8% in the second quarter.

Kansas City Southern (KSU), the smallest US Class I railroad company, reported the lowest weekly gains in total rail traffic in Week 29.

On July 25, the AAR (Association of American Railroads) published the rail freight data for Week 29, which ended on July 21.

The second quarter was good for railroad stocks from an earnings point of view. Most railroads surpassed adjusted earnings estimates.

Boeing, the world’s largest aerospace company, announced its second-quarter earnings results before the market opened on July 25.

3M’s (MMM) Safety and Graphics segment accounted for 21.6% of 3M’s overall revenue in Q2 2018 compared to 20.1% in Q2 2017, an increase of 1.5 percentage points on a year-over-year basis.

Ingersoll Rand (IR) announced its Q2 earnings on July 25. IR surpassed analysts’ adjusted EPS estimate of $1.73 by 7.2%.

Genesee & Wyoming’s (GWR) Australian region’s rail traffic volumes rose 5.4% YoY (year-over-year) in June.

On July 23, Lincoln Electric Holdings reported an adjusted EPS of $1.22 in the second quarter, which met analysts’ adjusted EPS estimate.

Honeywell International’s (HON) HBT (Home & Building Technologies) segment is its third-largest revenue contributor.

General Electric (GE) announced its second-quarter results today before the market opened. The company’s net earning fell 32.7%.

Honeywell (HON) is set to announce its Q2 2018 earnings on July 20 before the market opens. Since Q1, the stock has risen 2.4%.

Of the 22 analysts covering C.H. Robinson Worldwide (CHRW), four (18%) have recommended “strong buy,” three (14%) have recommended “buy,” 12 (54%) have recommended “hold,” and three (14%) have recommended “sell.”

Since C.H. Robinson Worldwide’s (CHRW) inception in 1905, the company has been in the business of sourcing fresh produce.

In Week 25, US rail carriers’ total rail traffic, including intermodal, expanded 3.7% YoY, hauling 557,300 railcars compared to 537,300.

From $1.6 billion in the first quarter of 2017, Boeing’s (BA) cash flow has increased 68% to $2.7 billion in the first quarter of 2018.

As of March 31, Genesee & Wyoming (GWR) had a net debt-to-forward-EBITDA multiple of 3.2x, which was much higher than the industry average of 2.1x.

The latest data as of May 31 show that 3M’s (MMM) short interest is range-bound in 2018.

Among the 14 analysts tracking 3M (MMM) stock, 29% have “buy” recommendations, and 50% are recommending a “hold.”

BNSF Railway’s intermodal volumes showed a minor 0.6% YoY rise, whereas UNP reported 7.1% YoY gains in Week 24.

In the week ended June 16, US railroads’ overall rail traffic including intermodal units grew 4.1% YoY to ~558,000 railcars.

There is significant pressure on General Electric’s (GE) management to come up with solutions quickly.

In Week 23, Western US major rail carrier BNSF Railway’s (BRK.B) carload traffic, excluding intermodal, rose 10.2% YoY (year-over-year) to ~103,600 railcars from ~94,000.

In this part, we’ll look at Honeywell’s short interest trends.

In Week 22, Calgary-headquartered Canadian Pacific Railway (CP) recorded a 3% YoY (year-over-year) fall in carload traffic.

April’s JOLTS data indicate that there were only 0.9 job seekers for every job available.

Railroad companies’ (IYJ) stocks are cyclical in nature. They move alongside the swings in the US and global economies.

In Week 20 (ended May 19), Calgary-headquartered Canadian Pacific Railway (CP) reported a high single-digit rise in carload traffic.

On May 15, the WTO decided that European aircraft maker Airbus got illegal government aid in two types of jetliners.

As per the latest Conference Board LEI report, the core capital goods orders for April were valued at $39.1 billion as compared to the downward revised March reading of $39.0 billion.

Boeing (BA), the world’s largest aerospace company, declared a quarterly cash dividend of $1.71 per share on its outstanding common stock.

On May 1, Boeing (BA) announced an agreement to acquire aerospace parts distributor KLX (KLXI) for $3.2 billion in cash.

Canada’s largest railroad, Canadian National Railway (CNI), recorded carload traffic growth in Week 16.

In the week ended April 21, or Week 16, Berkshire Hathaway–owned BNSF Railway’s (BRK.B) carload volumes rose 10.6% YoY (year-over-year) to ~99,500 railcars from ~90,000.

The world’s largest aerospace company, Boeing, announced its 1Q18 earnings today.

The core capital goods orders for March were valued at ~$39.3 billion, compared to a revised February reading of ~$38.4 billion.

The average weekly unemployment claims carry a weight of 3.0% on the LEI.

Genesee & Wyoming (GWR) has grown inorganically through acquisitions of small railroads in the last few years.

Analysts now expect Boeing’s revenue to be $22.1 billion, after revising their estimate upward by $300.0 million.

Honeywell International (HON) has made organizational changes to its HBT (Home and Building Technologies) for better alignment.

In a press release, 3M (MMM) said that it plans to announce its 1Q18 earnings on April 24, 2018, before the market opens.

Recently, General Electric said that it planned to restate its 2016 and 2017 revenues and earnings.

In the week ended April 7, US railroads’ total rail traffic grew 3.8% to 525,000 railcars from ~505,500 units year-over-year.

The manufacturing sector continues to expand despite the minor drop recorded in March.

Canadian Pacific Railway’s (CP) carload traffic fell 2.1% YoY (year-over-year) in Week 13 of 2018, to ~33,800 carloads from ~34,500.

In the week ended March 31, 2018, BNSF Railway’s (BRK.B) carload volumes rose 7.3%.

According to the ADP March National Employment Report, the US private sector added 241,000 jobs in March 2018.

On March 25, 2018, the Wall Street Journal released an article about General Electric’s (GE) Capital segment.

The corporate tax cuts from 35% to 21% could result in huge savings for US companies including railroads (IYJ).

In this series, we’ll look analysts’ revenue and earnings estimates for FedEx ahead of its fiscal 3Q18 earnings announcement.

In February 2018, Genesee & Wyoming’s (GWR) North American carloads expanded 0.3% YoY (year-over-year) on a reported basis.

In the ninth week of 2018, US-Mexico commerce-on-rail Kansas City Southern registered a 4% fall in its carload traffic.

Among the analysts, 38% recommended 3M stock as a “buy,” 37% recommended the stock as a “hold,” and 25% recommended the stock as a “sell.”

Now let’s examine the free cash flow levels of Canadian Pacfic and compare it to its arch-rival Canadian National Railway (CNI).

In Week 7 of 2018, KSU hauled 23,800 railcars, which was ~5% lower than the 25,000-plus railcars moved in Week 7 of 2017.

n the sixth week of 2018 (ended February 10), Norfolk Southern (NSC), a major Eastern US railroad, saw a 2.4% fall in its carload traffic.

In January 2018, Genesee & Wyoming’s (GWR) North American freight traffic contracted 1.7% YoY (year-over-year) on a reported basis.

In January 2018, Boeing took a 17-aircraft lead over its archrival Airbus. Boeing delivered 44 commercial aircraft compared Airbus’s 27 aircraft.

In the last one year, Boeing stock has returned a whopping 105.4%, and the company seems to be extremely positive about its 2018 outlook.

In the last few months, General Electric’s forward dividend yield has fallen.

On February 8, 2018, the Wall Street Journal reported that Boeing (BA) intends to acquire aerospace parts maker Woodward (WWD).

3M’s (MMM) Health Care segment recorded a revenue share of 18.4% in 4Q17 compared to 19.0% in 4Q16.

In the Defense, Space & Security segment, Boeing (BA) expects revenues of $21.5 billion–$22.5 billion in 2018.

The Conference Board CEO Confidence Index was reported to have increased from 59 in the third quarter to 63 in the fourth quarter, which means 63% of the respondents have a positive outlook.

General Electric (GE) failed to meet analyst revenue estimates in 4Q17.

In line with its carload traffic growth, Canadian Pacific Railway reported 11.5% growth in intermodal volumes.

In the third week of 2018, Norfolk Southern (NSC) witnessed a steep fall of 11.7% in carload traffic.

For the first three weeks of 2018, US rail carriers recorded cumulative carload traffic of ~691,300 carloads, down 5.7% from the same week in 2017.

Analysts surveyed by Thomson Reuters expect Boeing (BA) to report an operating profit of $2.7 billion in 4Q17.

Canadian National Railway (CNI) and rival Canadian Pacific Railway (CP) have higher operating margins than their US peers.