Honeywell Lowers Outlook Amid Bombardier Settlement Agreement

In a recent report, it was revealed that Honeywell International Inc. has reached a settlement with Bombardier concerning past litigation and signed a strategic agreement for advanced technology. However, Honeywell has also significantly cut its fourth-quarter and fiscal year 2024 earnings outlook, raising concerns for investors.

Date: 03-12-2024

AI Rating: 4

The report discusses recent developments between Honeywell International Inc. and Bombardier Inc., including a settlement regarding a lawsuit over jet engine costs and a strategic agreement for technology collaboration. However, it also highlights some concerning financial metrics from Honeywell.

Honeywell has lowered its fourth-quarter adjusted earnings per share (EPS) outlook to a range of $2.26 - $2.36, down from a prior estimate of $2.73 - $2.83. This places Honeywell's expected EPS below what analysts had anticipated, which was $2.78 per share. This revision suggests that the company is experiencing challenges that could negatively affect its profitability in the short term, impacting investor sentiment.

Furthermore, the company has revised its sales forecast for the fourth quarter to between $9.8 billion - $10.0 billion, from an earlier expectation of $10.2 billion to $10.4 billion. This downward adjustment signals potential revenue growth issues and adds to concerns regarding Honeywell's financial health.

For the fiscal year 2024, Honeywell now expects adjusted EPS to be in the range of $9.68 and $9.78, previously expecting $10.15 - $10.25. The expected annual revenues have also been lowered to $38.2 billion - $38.4 billion from a previous estimate of $38.6 billion - $38.8 billion. Once again, analysts had anticipated a higher EPS of $10.17 and revenues of $38.65 billion.

Overall, while the collaboration with Bombardier may create long-term value, the immediate financial outlook for Honeywell appears negative, reflecting challenges in meeting market expectations.

Stocks: HON