Honeywell up 1.5% following beat and raise report; spin-offs on track (148.13)
- Strong sales, orders and EPS growth, good margin expansion, robust cash generation; Impactful new Connected product launches.
- "We are making great progress in transforming Honeywell into a software-industrial leader. In the first quarter, we had significant new Connected product launches and commercial wins across our portfolio. The preparations to spin-off our Transportation Systems and Homes businesses are well underway, and we expect those to be complete by the end of the year."
- U.S. Section 232 Steel and Aluminum Tariffs Enacted March 2018:
- - HON limited direct purchases of steel / aluminum ... mostly indirect (tier 2) exposure - HON expects minor total impact from tariffs (<$10M on ~$60M imports) - Inflationary impact on non-imported steel and aluminum more relevant - Largest exposure in Performance Materials and Technologies: ~2/3 of HON exposure - Risk mitigation strategies developed in all businesses -- expect impact to be fully offset><10M on $60M in imports) Inflationary impact on non-imported steel and aluminum more relevant - Largest exposure in Performance Materials and Technologies: ~2/3 of HON exposure - Risk mitigation strategies developed in all businesses -- expect impact to be fully offset.
- U.S. Section 301 Proposed Tariffs on Chinese Original Goods Under Comment Period Until May 11:
- - Currently assessing HON exposures and developing mitigation strategies - Largest expected HON impacts: Aerospace (turbine parts), HBT, and SPS - China retaliatory tariffs could impact PMT / UOP (catalysts, adsorbents) - U.S. agreed to hold consultations with China -- developments ongoing - Closely following progress, while simultaneously developing mitigation plans to offset impacts
- China grew over 20%. Higher growth regions were high single digits; India (will improive throughout the year) and middle east mid-single digits Brazil remains challenged
- Stock absolutely compelling in the low-$140s; bought back more stock than usual in Q1; also looking for acquisitions.
- Boeing relationship remain strong.