Earlier that month, prior to its third-quarter results announcement, Honeywell completed the spinoff of its Transportation business into a standalone entity named Garrett Motion.
With the spinoffs of both Garrett and Resideo now complete, one can expect several changes at Honeywell. The company is better positioned to focus on areas like aerospace which have high growth potential. The spinoffs are likely to be beneficial to the company in the long term as it would provide more flexibility in terms of capital allocation and other growth initiatives.
Honeywell also completed the acquisition of Transnorm in November. Transnorm will complement the company’s automation solutions business. Any updates on the changes stemming from the spinoffs and acquisitions will be worth noting.
In the third quarter, Honeywell reported earnings that topped estimates along with sales that matched expectations. Net sales grew 6% to $10.7 billion while adjusted earnings rose 17% to $2.03 per share. The Aerospace business grew 10%, helped by strong demand from business aviation OEMs as well as growth in the air transport and business aviation aftermarket.
Last quarter, Honeywell revised its guidance for the full year of 2018 to reflect the Garrett and Resideo spinoffs. The outlook for sales is $41.7 billion to $41.8 billion and adjusted EPS is $7.95 to $8.00.
A majority of analysts have rated Honeywell’s stock as Buy with the remaining rating it as Hold. None have recommended Sell. Over the past one month, the stock has gained 8%.