Please ensure Javascript is enabled for purposes of website accessibility

Honeywell Is Verifying the Recovery

By David Smith - Updated Apr 6, 2017 at 11:32AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite the economy's continued shakiness, a group of big companies merit watching.

While the economy may still be unsettled, Honeywell (NYSE: HON) has joined other major companies such as United Technologies (NYSE: UTX) -- which posted analyst estimate-beating earnings of $1.20 for the latest quarter -- in pointing to what appears to be a light at the end of the tunnel.

Honeywell, which is involved in a mixture of technology and manufacturing businesses, checked in with earnings of $468 million, or $0.60 per share. Those figures compare with income of $450 million, or $0.60 a share, for the comparable quarter a year ago. At the same time, revenue climbed by 8% to $8.2 billion, compared with $7.6 billion in the second quarter of 2009. The numbers beat analyst estimates, which were projected at $8 billion in revenue, leading to $0.57 in per-share earnings.

Looking at Honeywell's segments, only the aerospace unit saw its revenues dip -- a relatively modest 3% on a year-over-year basis -- which was primarily a result of lower original equipment manufacturer sales.

The automation and control solutions group improved its sales 7% year over year, based on across-the-board regional growth, general industrial strengthening, and energy efficiency projects.

The company's other two segments, transportation systems and specialty materials, both achieved double-digit revenue growth in the quarter. The transportation group expanded its top line by 30% on global sales improvements. Concurrently, specialty materials sales were up 20%, also because of stronger global markets, along with petrochemical catalyst demand.

As CEO Dave Cote noted on the company's analyst call, "We are benefiting in the marketplace from the steps we took in each of our businesses to ensure that we and our suppliers were prepared for the recovery." At the same time, he pointed to improving sales in Asia-Pacific, specifically China, Japan, India, and Korea. Among Honeywell's significant wins in that neck of the woods, PetroChina (NYSE: PTR) has chosen the company's control and safety systems for the world's longest gas pipeline.

Finally, there remain other major manufacturing, technology, and transportation companies that have yet to report their quarterly results, including Boeing and BorgWarner. In the meantime, Honeywell clearly has joined the likes of General Electric (NYSE: GE) as a company that is verifying the recovery through a quarterly performance that should make Foolish investors take notice.  

Fool contributor David Lee Smith doesn't have financial interests in any of the companies mentioned in this article. Nevertheless, he welcomes your questions or comments. The Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Raytheon Technologies Corporation Stock Quote
Raytheon Technologies Corporation
$95.01 (2.00%) $1.86
General Electric Company Stock Quote
General Electric Company
$79.93 (1.30%) $1.03
PetroChina Company Limited Stock Quote
PetroChina Company Limited
$44.20 (-1.65%) $0.74
Honeywell International Inc. Stock Quote
Honeywell International Inc.
$200.87 (1.19%) $2.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.