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Honeywell (HON) to Report Q2 Earnings: What's in the Offing?
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Honeywell International Inc. (HON - Free Report) is scheduled to report second-quarter 2020 results on Jul 24, before the opening bell.
The company delivered an earnings surprise of 4.26%, on average, in the trailing four quarters, beating estimates on all occasions. Notably, Honeywell’s first-quarter 2020 adjusted earnings of $2.21 per share surpassed the Zacks Consensus Estimate of $1.98 by 11.62%.
In the past three months, shares of the company have gained 14.8% compared with the industry’s 13% growth.
Key Factors to Note
Honeywell is expected to have gained from its efforts to maximize productivity and operational excellence in the second quarter. Also, some of its actions during the second quarter, including the reduction of discretionary expenses, a hiring freeze and repositioning actions, are anticipated to have helped it maintain a healthy margin performance.
Coming to operating segments, strength across Honeywell’s defense and space businesses, supported by healthy demand for guidance and navigation systems, is likely to have boosted the Aerospace segment’s revenues in the second quarter. However, headwinds across its commercial original equipment business due to 737 MAX-related issues and lower business jet demand are likely to have significantly affected its revenues.
Also, a significant reduction in global air transport flight hours, owing to the coronavirus outbreak-related issues, is expected to have had a bearing on its commercial aftermarket business. Notably, the Zacks Consensus Estimate for the Aerospace segment’s revenues is currently pegged at $2,334 million, indicating a decline of 30.6% from the previous quarter’s reported number.
For the Performance Materials and Technologies segment, the volatile oil market, and weak oil and gas capital expenditure as well as the pandemic-related supply-chain disruptions are expected to have impacted its top-line performance. Also, low demand for security and building management products is likely to have affected the performance of the company’s Building Technologies segment’s in the second quarter.
The consensus estimate for Performance Materials and Technology’s second-quarter revenues is pegged at $2,130 million, suggesting an 11.1% decline from the first quarter’s reported figure while the same for Building Technologies is pinned at $1,235 million, implying a sequential decline of 3.6%.
However, a surge in demand for personal protective equipment, medical sensors and hand sanitizers is expected to have acted as tailwinds for the company’s Safety and Productivity Solutions segment. Also, its pro-active steps to expand manufacturing operations at its Smithfield and Phoenix facilities for the production of personal protective equipment are likely to have supported its top-line performance. The consensus mark for Safety and Productivity Solutions’ revenues is pegged at $1,427 million, implying a 0.2% rise sequentially.
Earnings Whispers
According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Honeywell has an Earnings ESP of -1.45% as the Most Accurate Estimate is pegged at $1.13, lower than the Zacks Consensus Estimate of $1.15.
Honeywell International Inc. Price and EPS Surprise
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Danaher Corporation (DHR - Free Report) currently has a Zacks Rank #2 and an Earnings ESP of +4.85%.
3M Company (MMM - Free Report) presently has a Zacks Rank #3 and an Earnings ESP of +2.62%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Honeywell (HON) to Report Q2 Earnings: What's in the Offing?
Honeywell International Inc. (HON - Free Report) is scheduled to report second-quarter 2020 results on Jul 24, before the opening bell.
The company delivered an earnings surprise of 4.26%, on average, in the trailing four quarters, beating estimates on all occasions. Notably, Honeywell’s first-quarter 2020 adjusted earnings of $2.21 per share surpassed the Zacks Consensus Estimate of $1.98 by 11.62%.
In the past three months, shares of the company have gained 14.8% compared with the industry’s 13% growth.
Key Factors to Note
Honeywell is expected to have gained from its efforts to maximize productivity and operational excellence in the second quarter. Also, some of its actions during the second quarter, including the reduction of discretionary expenses, a hiring freeze and repositioning actions, are anticipated to have helped it maintain a healthy margin performance.
Coming to operating segments, strength across Honeywell’s defense and space businesses, supported by healthy demand for guidance and navigation systems, is likely to have boosted the Aerospace segment’s revenues in the second quarter. However, headwinds across its commercial original equipment business due to 737 MAX-related issues and lower business jet demand are likely to have significantly affected its revenues.
Also, a significant reduction in global air transport flight hours, owing to the coronavirus outbreak-related issues, is expected to have had a bearing on its commercial aftermarket business. Notably, the Zacks Consensus Estimate for the Aerospace segment’s revenues is currently pegged at $2,334 million, indicating a decline of 30.6% from the previous quarter’s reported number.
For the Performance Materials and Technologies segment, the volatile oil market, and weak oil and gas capital expenditure as well as the pandemic-related supply-chain disruptions are expected to have impacted its top-line performance. Also, low demand for security and building management products is likely to have affected the performance of the company’s Building Technologies segment’s in the second quarter.
The consensus estimate for Performance Materials and Technology’s second-quarter revenues is pegged at $2,130 million, suggesting an 11.1% decline from the first quarter’s reported figure while the same for Building Technologies is pinned at $1,235 million, implying a sequential decline of 3.6%.
However, a surge in demand for personal protective equipment, medical sensors and hand sanitizers is expected to have acted as tailwinds for the company’s Safety and Productivity Solutions segment. Also, its pro-active steps to expand manufacturing operations at its Smithfield and Phoenix facilities for the production of personal protective equipment are likely to have supported its top-line performance. The consensus mark for Safety and Productivity Solutions’ revenues is pegged at $1,427 million, implying a 0.2% rise sequentially.
Earnings Whispers
According to our quantitative model, a stock needs to have the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) to increase the odds of an earnings beat. But that is not the case here as we will see below.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Honeywell has an Earnings ESP of -1.45% as the Most Accurate Estimate is pegged at $1.13, lower than the Zacks Consensus Estimate of $1.15.
Honeywell International Inc. Price and EPS Surprise
Honeywell International Inc. price-eps-surprise | Honeywell International Inc. Quote
Zacks Rank: Honeywell carries a Zacks Rank #3.
Stocks to Consider
Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Crane Company (CR - Free Report) has an Earnings ESP of +10.64% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Danaher Corporation (DHR - Free Report) currently has a Zacks Rank #2 and an Earnings ESP of +4.85%.
3M Company (MMM - Free Report) presently has a Zacks Rank #3 and an Earnings ESP of +2.62%.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.1% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>