What To Expect From Honeywell’s Q3 Earnings

by Trefis Team
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Honeywell International (NYSE:HON) is all set to report earnings for the third quarter of FY 2017 on October 20. The company has managed to post better-than-expected earnings throughout the year thus far. In this respect, the conglomerate decided to raise its full year guidance in the previous quarter. It now expects revenues to be in the $39.3−$40 billion range, while earnings per share is expected in the $7.05-$7.10 range. We can expect the rest of the year to carry forward a similar momentum, as each segment positions itself for sustained future growth.

That said, a weak global economy, volatile oil prices, and a tempered Chinese economy significantly threaten the demand for its business jets, and mobile scanners. We can expect the upcoming earnings call to shed more light on what to expect going forward.

Probable Takeaways:

  • The top-line in the quarter is expected to benefit from strong organic growth at Honeywell UOP. In Q3, the company managed to sign a number of new deals with names such as Canada Kuwait Petrochemical, Farabi Petrochemicals, and Kuwait Paraxylene Production. The financial translations of this deal have not been disclosed yet.
  • In the quarter, Honeywell also agreed to supply about 600,000 V200P water meters to Vitens in the Netherlands over the next 5 years. Additionally, Solstice continues its strong growth path with China’s TCL adopting the product in the manufacturing of its refrigerators. TCL manufactures close to 2 million refrigerators annually. Both projects are expected to help boost revenues significantly going forward.
  • Intelligrated is expected to show great results yet again. In the previous quarter, it drove more than 30% of the growth at Safety and Productivity Solutions. As orders and backlog at the business continue to grow, we can expect the division’s top-line to benefit greatly over the remainder of the year.
  • Further, the company signed a definite agreement to acquire Nextnine, a private security management solutions provider for industrial cyber security, last quarter. The acquisition is expected to boost Honeywell’s limited cyber security portfolio with complementary products and services. Additionally, Nextnine’s portfolio will also be used to improve facilities at the Honeywell Connected Plant. We can expect to learn more about this in the upcoming earnings call.

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