Honeywell Q4 Earnings: Shares Rise On Positive Outlook For 2018

by Trefis Team
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Honeywell International (NYSE: HON), as expected, posted a rather decent quarter this time around. The company managed to beat earnings and revenue consensus estimates while increasing its outlook for 2018 notably. The raise in the guidance is primarily attributable to the massive benefits the conglomerate intends to realize from the tax cut that was announced recently. As a result, it also hopes to repatriate close to $7 billion of the $10 billion that is held overseas over the next two years. That said, the tax cut also led to a massive one time charge of about $3.4 billion in the quarter.

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Going forward, the company expects to see an increasingly optimistic earnings performance in 2018. This led to a jump in the stock price post the earnings call.

  • Revenues in the quarter came in at $10.84 billion, representing a 6% organic increase, driven primarily by improved performance at the commercial aviation aftermarket division as a rise in travel demand boosted sales of spare parts and services to the airline industry. Further, organic growth at UOP and the inclusion of Intelligrated also helped push the top line higher in the quarter.

  • Honeywell is a company that is always looking to improve its products and services through better investments. In this respect, the repatriation of about $7 billion over the next two years could potentially serve as dry powder for further M&A ventures.
  • As mentioned above, the company has decided to raise its outlook significantly. For 2018, the company now expects to earn between $7.75 and $8 per share for the full year, in comparison to the previous guidance of $7.55 to $7.80. Additionally, revenues are expected to be in the range of $41.8 billion to $42.5 billion.

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