Honeywell reported year-over-year increases in both revenues and
earnings in third quarter 2014. With a diversified business
portfolio that mitigates operating risks, Honeywell has the
potential to earn consistent above-average returns in the long
term. In the current quarter, Honeywell has restructured its
operating segments to leverage on the shared business models and
the engineering and technology similarities. The company has a
flexible yet disciplined focus on cost and productivity, and
maintains a conservative balance sheet. Honeywell also continues to
benefit from investments in new products and services. However,
adverse foreign currency translations and volatility in commodity
prices are likely to peg back its growth momentum to some extent.
We maintain our Neutral recommendation for the stock.
Honeywell International Inc. 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..
Based in Morris Township, New Jersey, the company is a global
leader in refrigerants, aerosols, and foam-insulation blowing
agents that are used to replace ozone-depleting Chlorofluorocarbon
and Hydro Chlorofluorocarbons. These products also improve the
energy efficiency of homes, appliances, and commercial
refrigeration systems. Honeywell is engaged in manufacturing, sales
and service, research and development activities, mainly in the
United States, Europe, Canada, Asia and Latin America.
Honeywell organizes its business into three operating
Automation and Control Solutions (36.3% revenues came from this
segment in third-quarter 2014) provides environmental and
combustion controls, sensing controls, security and life safety
products and services, process automation and building solutions
and services for homes, buildings and industrial facilities.
Aerospace (38.5%) is a leading global provider of integrated
avionics, engines, systems and service solutions for aircraft
manufacturers, airlines, business and general aviation, military,
space and airport operations.
Performance Materials and Technologies segment (25.2%) offers
leading technologies and high-performance materials, including
hydrocarbon processing technologies, catalysts, adsorbents,
equipment and services, fluorine products, specialty films and
additives, advanced fibers and composites, intermediates, specialty
chemicals, electronic materials and chemicals.
Honeywell has decided to reorganize its operating segments by
merging Transportation Systems segment with the Aerospace segment
to leverage on the shared business models and the engineering and
technology similarities. Effective third-quarter 2014, the three
business segments of the company are: Aerospace, Automation and
Control Solutions, and Performance Materials and Technologies. The
overall financial performance of the company will include
Transportation Systems within Aerospace segment and will have no
material impact on the historical consolidated financial position,
results of operations, or cash flows.
Honeywell International Inc. (HON): Read the Full
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