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Industrial and aerospace heavyweight Honeywell $HON reported better than expected earnings on Friday before the market opened and also raised guidance.  Honeywell re-confirmed it would split two noncore units into separate publicly traded companies by years end.rate publicly traded companies by years end.

Honeywell AeroSpace

Honeywell Aerospace Positioning Itself in global markets

Earnings:

Honeywell earnings rose to $2.12 a share adjusted as revenue climbed 8% to $10.92 billion ahead of the forecast $2.01 a share on revenue of $10.78 billion. Net income attributable to Honeywell decreased to $1.26 billion or $1.68 per share from $1.39 billion or $1.80 per share last year. Reported EPS declined 7%.

Honeywell International Inc. NYSE: HON

Market Reaction > Pre-market 151.25 +3.71 (2.51%)

Highlights

  • Operating income margin improved 40 basis points to 16.3%.
  • Segment margin improved 60 basis points to 19.6%.
  • Aerospace sales grew 8% on an organic basis driven by growth in business aviation OE, demand in commercial aftermarket and Transportation Systems along with strength in defense.
  • Home and Building Technologies sales rose 3% organically helped by strength in residential thermal products and growth in the ADI distribution business. 

Outlook:

HON Earnings Q3 Guidance

"Given our strong second-quarter performance and confident outlook, we are raising our 2018 guidance," said CEO Darius Adamczyk.

"For the full year, we now expect organic sales growth to be 5 to 6 percent, segment margin expansion to be 40 to 60 basis points, earnings per share to be $8.05 to $8.15, and free cash flow to be $5.6 to $6.2 billion."

HON Earnings Q2 18

Honeywell will spin off its home and transportation units by year end to streamline.

Honeywell expects to complete the spinoff of its Transportation Systems operations by the end of the third quarter, at which time the business will be rebranded as Garrett. The Homes business spinoff is on track to be completed by the end of 2018. The company’s long-cycle orders and backlog grew 11% and 14% respectively

Source: Honeywell, AlphaStreet

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