Global diversified technology and manufacturing company
Honeywell International Inc
) offered a tepid outlook for 2014. Expectations that the
macroeconomic environment next year may be similar to 2013
resulted in a cautious outlook.
Nevertheless, the company expects sales, profit margins and
earnings to increase during the ensuing year. The company also
reiterated its 2013 guidance.
Honeywell affirmed its 2013 guidance with earnings per share
of $4.90 to $4.95. The current Zacks Consensus Estimate is pegged
in unison at $4.95. Sales expectation in 2013 was confirmed
between $38.8 billion and $39 billion.
Honeywell expects sales of $40.3 billion-$40.7 billion in
2014. Despite the challenging environment, the company's balanced
mix of long- and short-cycle businesses, along with organic
growth in new products and expansion in high-growth regions augur
well on a long-term perspective.
The operational improvements coupled with strong productivity and
lucrative investments are all expected to contribute to healthy
margin expansion in the long run. The company has already
achieved the low end of its margin target in 2013 and expects
operating margins for 2014 in the range of 15.3%-15.6%.
Honeywell expects earnings per share in the range of $5.35
-$5.55 in 2014, which represents earnings growth of 8.0%-12.0%.
The current Zacks Consensus Estimate is pegged at $5.55 a
Recently, Honeywell authorized a share repurchase program
under which it can repurchase up to $5 billion worth of
shares over a period of time through open market transactions.
The strategic move signifies an inherent strength in the
company's balance sheet and working capital management that gives
it enough confidence to generate adequate cash flow to deliver
shareholder value. The company expects free cash flow for 2014 in
the range of $3.8 billion -$4.0 billion, which represents growth
of 4.0% -9.0%.
Honeywell is a global diversified technology and manufacturing
company with a wide range of aerospace products and services,
control, sensing and security technologies for buildings, homes
and industry, turbochargers, automotive products, specialty
chemicals, electronic and advanced materials, process technology
for refining and petrochemicals, and energy efficient products
and solutions for homes, business and transportation.
Honeywell currently has a Zacks Rank #3 (Hold). Better-ranked
stocks in the industry include
Hutchison Whampoa Ltd
Raven Industries Inc
). All these stocks carry a Zacks Rank #2 (Buy).
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