Honeywell’s Q2 Earnings: Revenues Miss As Earnings Beat Consensus

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Honeywell

Honeywell (NYSE: HON) posted solid figures this quarter. The company managed to beat analyst earnings estimate this quarter by $0.02, posting an EPS of $1.66. However, revenues came in at $9.99 billion falling short of the consensus estimate of $10.13 billion. The market reacted to earnings negatively as the stock price fell by 1% at closing on Friday.

  • Sales at Aerospace declined by 1% primarily due to the weaker volumes at Defense and Space mostly due to unexpected program delays. Furthermore, the commercial helicopters businesses has been affected adversely by the declining oil and gas markets. That being said, aftermarket businesses are most robust than ever. Commercial Aviation Aftermarket sales increased at a rate of 6% in the quarter. At Transportation, revenues increased by 3% due to new platform launches and volume growth. The company continues to increase the applications of gas and diesel light vehicles in European and Chinese markets.
  • ACS business benefitted greatly from acquisitions, most notably, that of Elster. As synergies continue to show advantages, we can expect the division to keep posting positive figures in the near future. Furthermore, Fire and Safety, and Solutions and Distribution businesses showed continued growth while sales in Energy and Security showed declined sales.
  • As expected, PMT sales fell 4% and this is consistent with the company’s guidance. The oil and gas market continues to be slow at the moment and this has affected business considerably. Despite this, management is confident that orders and backlogs are in line with their expectations.
  • Process Solution continues to show resilience in a difficult market. The business has a unique mix of automation, technology field instrumentation products and aftermarket offerings that has helped it stand out among competition. Sales have increased by about 8% here due to substantial growth in in the projects business and increased software and services sales.

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment / ask questions on the comments section

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis of Honeywell

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