Honeywell International Inc. HON is scheduled to release third-quarter 2024 results on Oct. 24, before market open. The Zacks Consensus Estimate for revenues is pegged at $9.9 billion, indicating growth of 7.4% from the prior-year quarter’s reported figure.
The consensus mark for earnings is pinned at $2.51 per share, which has edged down 0.4% in the past 60 days. The figure indicates a jump of 10.6% from the year-ago quarter's reported figure. The company’s earnings beat the consensus estimate in the preceding four quarters, delivering an average surprise of 2.1%. In the last reported quarter, its bottom line beat the consensus estimate by 2.9%. Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Let us see how things have shaped up for Honeywell this earnings season.
Key Factors & Estimates for Q3
Strength across Honeywell’s commercial aviation aftermarket business, driven by strong demand in the air transport and business aviation markets, is likely to have supplemented the top-line performance of its Aerospace Technologies segment. Also, strength in the company’s commercial aviation original equipment business, backed by an improvement in build rates, is likely to have augmented the segment’s performance. Solid momentum in the defense and space business, owing to stable U.S. and international defense spending volumes, is expected to have been a tailwind as well. We expect the segment’s revenues to increase 12.8% year over year to $3.95 billion in the third quarter.
The Energy and Sustainability Solutions segment is expected to witness a year-over-year increase in revenues, driven by higher orders for its products and solutions within the advanced materials business. However, softness in gas processing equipment projects under the UOP business is likely to have dragged its performance. Our estimate for the segment’s revenues is pegged at $1.57 billion, indicating a year-over-year increase of 1.4%.
Solid demand for building products and solutions, along with the acquisition of Global Access Solutions (in June 2024), is expected to have driven the Building Automation segment’s performance.
However, Honeywell’s Industrial Automation segment’s performance is expected to have been weak in the quarter. Persistent weakness in the company’s warehouse and workflow solutions and sensing and safety technologies businesses owing to lower demand for projects is expected to have hurt the segment's top-line performance. Also, continued softness in the warehouse automation business owing to lower investments in the market is likely to weigh on its results. For the third quarter, our estimate for revenues from the Building Technologies and Industrial Automation segments is pegged at $1.7 billion and $2.6 billion, respectively.
The escalating cost of sales is likely to have posed a threat to HON’s bottom line. Acquisition-related costs and high input costs are expected to have pushed up its operating expenses, which are likely to have reflected in its margins. We expect the costs of sales to be $6.2 billion for the third quarter, indicating an increase of 9.1% year over year.
HON has considerable exposure to overseas markets. Given the company’s substantial international operations, foreign currency headwinds are likely to have marred its margins and profitability.
Honeywell International Inc. Price and EPS Surprise
Honeywell International Inc. price-eps-surprise | Honeywell International Inc. Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Honeywell this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as elaborated below.
Earnings ESP: Honeywell has an Earnings ESP of -0.35% as the Most Accurate Estimate is pegged at $2.50, lower than the Zacks Consensus Estimate of $2.51. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #4 (Sell).
Stocks With Favorable Combination
Here are three companies, which according to our model, have the right combination of elements to post an earnings beat in the upcoming release:
Markel Group Inc. MKL has an Earnings ESP of +5.63% and sports a Zacks Rank of 1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to release third-quarter 2024 results on Nov. 6. MKL’s earnings have surpassed the Zacks Consensus Estimate twice in the preceding four quarters while missing the mark on the other two occasions, the average surprise being 35.4%.
3M Company MMM has an Earnings ESP of +1.81% and a Zacks Rank of 3 at present.
The company is slated to release third-quarter 2024 results on Oct. 22. 3M’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.6%.
Parker-Hannifin Corporation PH has an Earnings ESP of +0.83% and a Zacks Rank of 2 at present. The company is slated to release its first-quarter fiscal 2025 results on Nov. 7.
PH’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 11.2%.
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Honeywell International Inc. (HON) : Free Stock Analysis Report
3M Company (MMM) : Free Stock Analysis Report
Parker-Hannifin Corporation (PH) : Free Stock Analysis Report
Markel Group Inc. (MKL) : Free Stock Analysis Report
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