Honeywell Earnings: Shares Jump On Strong Q1 Figures

Honeywell International began the year on a high note, posting solid numbers for Q1. The company managed to beat the earnings and revenue estimates by a comfortable margin. Despite beating the analyst estimate, revenue figures came in short by 0.3% year-on-year. The top line was hurt on adverse foreign currency translation and the divestitures of its Resins and Chemicals, and Aerospace government services businesses in 2016. That said, the company reported a growth of about 2% in organic sales.

The management has announced that they aim on boosting the company’s short term results on the back of strategic investments, greater operational efficiencies, and stronger demand in most key markets. In this respect, they raised the guidance, now expecting to report earnings in the range of $6.90-$7.10 per share for FY 2017. This represents a year-on-year growth of about 7-10%. This news led the stock to rally up reaching a record high.

Key Highlights:

• The biggest growth in the quarter was recorded at Safety and Productivity Solutions (SPS). The segment posted a revenue of $1,324 million, up by a remarkable 25%. The sales were driven by higher volumes in Workflow Solutions and Safety Products businesses. Furthermore, the company witnessed better-than-expected growth at its newest acquisition – Intelligrated. Growth was recorded at a robust 20%, performing much better than in Q1 2016, when it wasn’t a part of Honeywell.

• Positive growth was also witnessed at the Home and Building Technologies business. Revenues came in at around $2,553 million, up by a modest 3.1% year-over-year. The top line benefited from new product launches and robust distribution. Furthermore, the company saw a 15% rise in growth in its China business, driven primarily by the clean air and water product portfolios. The company estimates that China will continue to grow in the year on the back of increased momentum in the residential real-estate market.

• Performance Materials and Technologies had a really strong quarter this time around, posting an organic growth of about 5%. The growth was spurred on by 6 new deals that were signed in the U.S. in this quarter alone. We can expect the division to see the top line rise as the year continues.

• Aerospace sales remained relatively flat in the quarter year-over-year. That said, the revenues came in higher than what the company had guided to back in January. The company benefited from higher sales at its aftermarket business. This comes as some relief at a time when the aerospace market is experiencing a continued downtrend.

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