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The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 3.5%.
Let’s see how things have shaped up for Honeywell this earnings season.
Honeywell International Inc. Price and EPS Surprise
Strength in commercial aerospace, solid operational execution and improving supply chains are expected to drive Honeywell’s third-quarter results. For the third quarter, we expect the company’s Aerospace segment revenues to increase 13.5% year over year due to strong commercial aftermarket demand owing to a recovery in commercial flight hours. Our estimate for the segment’s operating profit hints at a year-over-year increase of 16.8%.
The Performance Materials and Technologies (PMT) segment is expected to generate a year-over-year increase in revenues due to strength in process solutions and UOP operations. The segment’s operations have been boosted by the acquisition of Compressor Controls Corporation, which has bolstered HON’s sustainability portfolio with new carbon capture control solutions. Our estimate for PMT revenues in the third quarter indicates a 4.7% increase from the year-ago reported number. We expect the segment’s operating profit to inch up 3.9% on a year-over-year basis.
However, Honeywell’s Safety and Productivity Solutions segment is expected to put up a weak show in the to-be-reported quarter due to lower warehouse, and workflow and productivity solutions volumes. We expect the segment’s revenues to decline 19.5% on a year-over-year basis. Our estimate for the segment’s operating profit suggests a 20.9% decline from the year-ago reported figure.
Given HON’s presence in diverse regions, foreign currency headwinds may affect its top line in the soon-to-be-reported quarter. Also, the company’s bottom line is expected to reflect the impact of raw material cost inflation.
Earnings Whispers
Our proven model predicts an earnings beat for Honeywell this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: Honeywell has an Earnings ESP of +0.46% as the Most Accurate Estimate is pegged at $2.23, higher than the Zacks Consensus Estimate of $2.22. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Honeywell currently carries a Zacks Rank #3.
Highlights of Q2 Earnings
Honeywell’s second-quarter 2023 adjusted earnings of $2.23 per share surpassed the Zacks Consensus Estimate of $2.20. The bottom line increased 6.2% year over year. Total revenues of $9,146 million missed the Zacks Consensus Estimate of $9,171 million. The top line inched up 2.2% from the year-ago quarter.
Other Stocks to Consider
Here are some other companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
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Will Honeywell (HON) Beat on Q3 Earnings on Aerospace Strength?
Honeywell International (HON - Free Report) is slated to release third-quarter 2023 results on Oct 26, before market open.
The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 3.5%.
Let’s see how things have shaped up for Honeywell this earnings season.
Honeywell International Inc. Price and EPS Surprise
Honeywell International Inc. price-eps-surprise | Honeywell International Inc. Quote
Factors to Note
Strength in commercial aerospace, solid operational execution and improving supply chains are expected to drive Honeywell’s third-quarter results. For the third quarter, we expect the company’s Aerospace segment revenues to increase 13.5% year over year due to strong commercial aftermarket demand owing to a recovery in commercial flight hours. Our estimate for the segment’s operating profit hints at a year-over-year increase of 16.8%.
The Performance Materials and Technologies (PMT) segment is expected to generate a year-over-year increase in revenues due to strength in process solutions and UOP operations. The segment’s operations have been boosted by the acquisition of Compressor Controls Corporation, which has bolstered HON’s sustainability portfolio with new carbon capture control solutions. Our estimate for PMT revenues in the third quarter indicates a 4.7% increase from the year-ago reported number. We expect the segment’s operating profit to inch up 3.9% on a year-over-year basis.
However, Honeywell’s Safety and Productivity Solutions segment is expected to put up a weak show in the to-be-reported quarter due to lower warehouse, and workflow and productivity solutions volumes. We expect the segment’s revenues to decline 19.5% on a year-over-year basis. Our estimate for the segment’s operating profit suggests a 20.9% decline from the year-ago reported figure.
Given HON’s presence in diverse regions, foreign currency headwinds may affect its top line in the soon-to-be-reported quarter. Also, the company’s bottom line is expected to reflect the impact of raw material cost inflation.
Earnings Whispers
Our proven model predicts an earnings beat for Honeywell this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: Honeywell has an Earnings ESP of +0.46% as the Most Accurate Estimate is pegged at $2.23, higher than the Zacks Consensus Estimate of $2.22. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Honeywell currently carries a Zacks Rank #3.
Highlights of Q2 Earnings
Honeywell’s second-quarter 2023 adjusted earnings of $2.23 per share surpassed the Zacks Consensus Estimate of $2.20. The bottom line increased 6.2% year over year. Total revenues of $9,146 million missed the Zacks Consensus Estimate of $9,171 million. The top line inched up 2.2% from the year-ago quarter.
Other Stocks to Consider
Here are some other companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
Stanley Black & Decker (SWK - Free Report) has an Earnings ESP of +1.84% and a Zacks Rank #2. The company is scheduled to release third-quarter results on Oct 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stanley Black pulled off a trailing four-quarter earnings surprise of 47.2%, on average. The stock has gained 10.2% in a year.
Tenaris (TS - Free Report) has an Earnings ESP of +2.56% and a Zacks Rank #3. The company is slated to release third-quarter results on Nov 1.
Tenaris delivered a trailing four-quarter earnings surprise of 7.7%, on average. The stock has rallied 14.2% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.