Honeywell 3Q Earnings Meet Street Outlook, Revenue Tops Analyst Forecasts Despite Aerospace Sales Decline

HoneywellLogoHoneywell International (NYSE: HON) reported third quarter earnings that met analysts’ forecasts with revenue above Wall Street’s outlook before markets opened Friday nearly a week after the industrial conglomerate lowered full-year financial guidance in part on declines in its aerospace division.

The GovCon Index– and S&P 500-listed company posted earnings of $1.67 per share to fall in-line with its adjusted outlook when excluding a $0.07 deployment for restructuring.

With that restructuring, Honeywell reported earnings of $1.60 per share to fall in-line with Wall Street’s expectation but register its first year-over-year EPS decline since 2011.

Morris Plains, N.J.-based Honeywell expects fourth quarter earnings of $1.74-$1.78 per share and full-year EPS of $6.60-$6.64.

Honeywell’s stock plunged 7.5 percent Oct. 7 as the biggest drag on the GCI and second-largest on the S&P 500 after it issued the reduced guidance on lower aerospace shipments and the division of its former automation and control solutions business into two new segments.

Third quarter EPS includes a $0.14 gain on the $300 million sale of Honeywell’s former U.S. government services business to KBR (NYSE: KBR) in September.

Third quarter net income fell 2.19 percent year-over-year to $1.24 billion.

Revenue climbed 2.01 percent to $9.8 billion versus the analyst forecast of $9.78 billion on higher activity in its distribution and building solutions business.

Sales in the aerospace segment declined 5.73 percent to $3.6 billion on completions of U.S. space and international defense programs and reduced business and general aviation volumes.

Honeywell expects full-year revenue of $39.4 billion-$39.6 billion, which would show 2-3 percent overall growth and a 1-2 percent decline in core organic sales.

As of Thursday’s close, shares in Honeywell have added 5.14 percent since the start of the year and are up 10.66 percent over 12 months.

By comparison, the GovCon Index is up 5.27 percent on a year-to-date basis and has risen 5.75 percent for 52 weeks versus the S&P 500 composite index’s respective gains of 4.77 percent YTD and 5.44 percent over one full year.

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