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Honeywell Offers Tepid 2017 Guidance on Sluggish Demand
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Industrial goods manufacturer Honeywell International Inc. (HON - Free Report) recently offered a lackluster guidance for 2017 owing to continued macroeconomic woes. At the same time, the company anticipates fourth-quarter 2016 earnings to be at the lower end of its previously guided range.
Honeywell expects a tepid demand pattern for its business jets and mobile scanners in 2017 due to sluggish global growth, volatility in crude oil prices and a tempered Chinese economy. Consequently, the company projects 2017 earnings in the range of $6.85–$7.10 per share, while revenues are anticipated to be down 1% to up 2% year over year. For the fourth quarter, the company anticipates earnings of $1.74 per share, which is at the lower end of its previously guided range of $1.74–$1.78.
Although share price dipped initially on the news, it eventually recovered during the day and remained flat at $116.38 at the close of trading as management allayed investors’ fears through a focused roadmap to revive growth. Notably, Honeywell outperformed the Zacks categorized Diversified Operations industry with an average year-to-date return of 12.3% compared with 7.0% for the latter.
In order to counter the muted growth environment and improve its profitability, Honeywell intends to initiate stringent cost-cutting efforts, while improving its product portfolio with opportune acquisitions and strategic divestures. The company is already reaping significant benefits from nine accretive acquisitions inked since 2015 and portfolio restructuring initiatives. It further expects a relatively improved performance from some of its businesses that were laggards in 2016, like hand-held scanners and worker safety equipment.
The company’s balanced mix of long- and short-cycle businesses, along with a decent organic growth in new products and expansion in high-growth regions augur well on a long-term perspective. Honeywell remains focused on increasing its presence in high-growth regions with a flexible yet disciplined focus on cost and productivity.
Koninklijke KPN N.V. is currently trading at a forward P/E of 27.5x.
Hitachi has a long-term earnings growth expectation of 13% and has beaten estimates thrice in the trailing four quarters for an average positive earnings surprise of 103.5%.
Middleby has long-term earnings growth expectation of 22% and has beaten estimates in each of the trailing four quarters for an average positive earnings surprise of 15.9%.
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Honeywell Offers Tepid 2017 Guidance on Sluggish Demand
Industrial goods manufacturer Honeywell International Inc. (HON - Free Report) recently offered a lackluster guidance for 2017 owing to continued macroeconomic woes. At the same time, the company anticipates fourth-quarter 2016 earnings to be at the lower end of its previously guided range.
Honeywell expects a tepid demand pattern for its business jets and mobile scanners in 2017 due to sluggish global growth, volatility in crude oil prices and a tempered Chinese economy. Consequently, the company projects 2017 earnings in the range of $6.85–$7.10 per share, while revenues are anticipated to be down 1% to up 2% year over year. For the fourth quarter, the company anticipates earnings of $1.74 per share, which is at the lower end of its previously guided range of $1.74–$1.78.
Although share price dipped initially on the news, it eventually recovered during the day and remained flat at $116.38 at the close of trading as management allayed investors’ fears through a focused roadmap to revive growth. Notably, Honeywell outperformed the Zacks categorized Diversified Operations industry with an average year-to-date return of 12.3% compared with 7.0% for the latter.
In order to counter the muted growth environment and improve its profitability, Honeywell intends to initiate stringent cost-cutting efforts, while improving its product portfolio with opportune acquisitions and strategic divestures. The company is already reaping significant benefits from nine accretive acquisitions inked since 2015 and portfolio restructuring initiatives. It further expects a relatively improved performance from some of its businesses that were laggards in 2016, like hand-held scanners and worker safety equipment.
The company’s balanced mix of long- and short-cycle businesses, along with a decent organic growth in new products and expansion in high-growth regions augur well on a long-term perspective. Honeywell remains focused on increasing its presence in high-growth regions with a flexible yet disciplined focus on cost and productivity.
Honeywell currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry include Koninklijke KPN N.V. (KKPNF - Free Report) , Hitachi, Ltd. (HTHIY - Free Report) and The Middleby Corporation (MIDD - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Koninklijke KPN N.V. is currently trading at a forward P/E of 27.5x.
Hitachi has a long-term earnings growth expectation of 13% and has beaten estimates thrice in the trailing four quarters for an average positive earnings surprise of 103.5%.
Middleby has long-term earnings growth expectation of 22% and has beaten estimates in each of the trailing four quarters for an average positive earnings surprise of 15.9%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>