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Honeywell Reports Strong First-Quarter Earnings
Honeywell has announced its first-quarter earnings, leading to a nearly 4% rise in shares during premarket trading. The results were released before the market opened on Tuesday, reflecting notable growth in various sectors.
For the three months ending March 31, Honeywell recorded revenues of $9.82 billion, which represents a 7.9% increase compared to the same period last year. This figure surpassed analyst expectations of $9.59 billion, according to LSEG data.
The company also reported adjusted earnings per share (EPS) of $2.51, exceeding predictions of $2.21. Annually, the adjusted EPS saw a 7.3% increase, with results exceeding management’s forecasts across the board.
Quarterly Highlights
Honeywell’s aerospace technology segment led the way with a 9% organic revenue growth. Other noteworthy performances include an 8% increase in building automation, alongside smaller-than-anticipated declines in industrial automation and energy sustainability sectors. Notably, orders rose 3% organically, primarily driven by aerospace and building automation contributions. The total backlog at the close of the quarter stood at $36.1 billion, reflecting an 8% year-over-year increase.
Management Guidance
Management has maintained a largely steady outlook for the future, which is viewed favorably given previous adjustments made over the past few years. While the high end of the sales guidance range has been decreased by $100 million, adjustments to the segment margin range were minimal. On the other hand, the outlook for adjusted earnings has been revised upward, with the lower end adjusted from $10.10 to $10.20 and the midpoint moved from $10.30 to $10.35. The top end of the guidance remained unchanged at $10.50.
Significantly, management has factored in potential impacts from tariffs and some identified demand risks for the latter half of the year due to ongoing global uncertainties.
Market Response and Cautionary Notes
Despite the positive quarterly results, financial expert Jim Cramer has urged caution regarding the stock’s early gains. He noted that, although the initial performance is promising, the commentary during the upcoming conference call could temper expectations regarding the second half of the year, especially in an environment filled with tariff-related challenges. Cramer emphasized a cautious approach by avoiding the temptation to chase stocks that have seen significant single-session increases.
Looking Forward
As Honeywell prepares for its second quarter, earnings guidance appears strong, exceeding Wall Street projections, though sales forecasts are slightly below consensus expectations.
As the situation evolves, further insights will be provided following the conference call, which is expected to offer additional details related to Honeywell’s performance and future strategy.
An aircraft engine is being tested at Honeywell Aerospace in Phoenix.
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