Yahoo Finance Can Honeywell (HON) Retain Beat Streak This Earnings Season?
Honeywell International Inc. HON is scheduled to report first-quarter 2023 results on Apr 27, before market open.
The Zacks Consensus Estimate for the company’s first-quarter earnings has been revised upward by 1% in the past 60 days. The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 2.9%.
Let’s see how things have shaped up for Honeywell this earnings season.
Factors to Note
Honeywell’s first-quarter results are expected to reflect strength in its Aerospace segment. Strong commercial aftermarket demand owing to a recovery in commercial flight hours and continued improvement in flight hours, especially in wide body, are likely to have aided HON’s Aerospace segment in the quarter. The Zacks Consensus Estimate for Aerospace net sales in the first quarter indicates a 7% increase from the year-ago reported number.
Strength in advanced materials business and UOP operations is likely to have driven the Performance Materials and Technologies segment. The consensus mark for Performance Materials and Technologies segment’s revenues in the first quarter hints at a 3.3% jump from the year-ago reported number. We expect segmental revenues to rise 2% from the year-ago reported number.
The company’s US Digital Designs buyout is likely to have augmented its revenues in the to-be-reported quarter. The Zacks Consensus Estimate for Honeywell’s total revenues in the first quarter indicates a 1.4% increase from the year-ago reported number. We expect first-quarter revenues to climb 1.2% from the year-ago period.
However, HON’s Building Technologies segment’s performance is likely to have been impacted by parts shortages in the to-be-reported quarter. Also, softness in volumes due to supply-chain constraints is likely to have dented its first-quarter performance.
Raw material cost inflation and high selling, general and administrative expenses might have weighed on the company’s bottom line. Given Honeywell’s substantial international presence, foreign currency headwinds might have affected its top line in the quarter to be reported.
Honeywell International Inc. Price and EPS Surprise
Honeywell International Inc. price-eps-surprise | Honeywell International Inc. Quote
Earnings Whispers
Our proven model suggests an earnings beat for HON 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, which is the case here, as elaborated below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: HON has an Earnings ESP of +0.74% as the Most Accurate Estimate is pegged at $1.94, higher than the Zacks Consensus Estimate of $1.93.
Zacks Rank: HON presently carries a Zacks Rank of 3.
Highlights of Q4 Earnings
Honeywell’s fourth-quarter 2022 adjusted earnings (excluding $1.01 from non-recurring items) of $2.52 per share surpassed the Zacks Consensus Estimate of $2.49. The bottom line improved 20.6% year over year. Total revenues of $9,186 million missed the Zacks Consensus Estimate of $9,221.1 million. However, the top line increased 6% from the year-ago quarter. Organic sales increased 10% due to growth in Honeywell Building Technologies, Performance Materials and Technologies and Aerospace segments.
Other Stocks to Consider
Here are some other companies that you may want to consider, as according to our model, these have the right combination of elements to beat on earnings this reporting cycle.
Caterpillar CAT, which has an Earnings ESP of +2.54% and a Zacks Rank of 3, is scheduled to release first-quarter 2023 earnings numbers on Apr 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
Caterpillar’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 9%.
A. O. Smith Corporation AOS has an Earnings ESP of +10.19% and a Zacks Rank of 3. The company is scheduled to release first-quarter 2023 results on Apr 27.
AOS’ earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters while matching in one, the average beat being 3.2%.
Illinois Tool Works ITW has an Earnings ESP of +1.37% and a Zacks Rank of 3. The company is slated to release first-quarter 2023 results on May 2.
Illinois Tool’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 0.9%.
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A. O. Smith Corporation (AOS) : Free Stock Analysis Report
