There appears to be an emerging trend in this still-early earnings season that differs from two or three quarters ago. While in the earlier periods, overseas strength saved many large U.S. corporations from a slowdown at home, the norm this session appears to be one of solid results for now, but with caution based on global circumstances being the watchword for the future.
That certainly was the case with Honeywell
Looking at Honeywell's results, the company's income for the quarter rose just over 16% to $719.0 million, or $0.97 a share, versus $618.0 million, or $0.81 a share. Revenue was up 6% to $9.3 billion. Not as big a revenue jump as last quarter, but better on the earnings side.
More specifically, the New Jersey-based industrial conglomerate checked in with decidedly mixed results from its various segments. The automation and control systems group -- the company's largest unit -- recorded 15% improvements in both its sales and profits, based on acquisitions and a sliding dollar.
At the same time, its aerospace segment -- number two in the size strata -- recorded flat revenues and an 8% dip in earnings. That wasn't helped by the transportation services section, which managed to drop revenue by 6% and profit by 18%, thanks to lower volume.
On the other hand, specialty materials posted a nice bump to revenue and a tiny bump to profit. Up, down, up, down.
Taking all that, mixing it together and calling it done, management cut back on its earnings outlook for the year to $3.76 to $3.80, narrowing down an earlier $3.75 to $3.85. At the same time, management still expects earnings for the current (fourth) quarter to improve by 7% to 11%, cutting back from the 14% year-over-year increase expected by the Wall Street dart-throwers.
With both the U.S. and the world's economies stumbling, it'll be important to add results from Lockheed Martin
Beyond that, my inclination regarding Honeywell is to take an economy-driven respite from the company for a quarter or two. In these difficult economic times, I can't help but find the conglomerate's mix of results more than a little daunting.
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