The company had a stellar fourth quarter

Published By: Angela Campbell on January 31, 2017 08:33 am EST

Honeywell International Inc. (NYSE:HON) finished 2016 on a high-note due to solid performance in the fourth quarter of fiscal 2016 (4QFY16) with 14% earnings growth. It also reported free cash flow conversion of 126%. However, Honeywell believes that it could have performed even better if it wasn’t for poor market conditions.

However, Investors were not satisfied with the results and the future guidance provided by the company. However, many analysts believe that given the market conditions in 2016, Honeywell performed extremely well.

The revenues for the quarter were reported at $9.99 billion, which is lower than the consensus estimate of $10.15 billion. This has mainly because of fewer sales witnessed in the quarter, which has been the industry-wide trend.

The sales for 4QFY16 were down 1% in terms of organic growth. The difference is because of the acquisitions, and the divesture of the Aerospace government service business. This has had a negative effect on the results.

In addition, the company reported net income of $1.034 billion or $1.34 per share in the fourth quarter. This is down from $1.53 per share posted in the same period last year. This is because the sale of new jets or planes has decreased over the past couple of months due to diminishing demand.

Future Outlook

Honeywell has reduced its sales forecasts for fiscal year 2017 (FY17). This was mainly due to a downturn in corporate jet market, which has badly affected the overall market. The demand for cockpit controls, aircraft engines and other parts have witness a decline, and the company does not expect it to improve this year as well.

Recent Development

Honeywell also stated that it will be providing the Internet-of-things (IoT) based connected performance services to AL WAHA Petrochemical Company in order to maximize the production of propylene. This will further enhance safety, efficiency and reliability at work.

Stock Update

Honeywell stock traded at $119.11, climbing 0.58% during Monday’s active trading session. The stock has a 52-week range of $98.89-$119.38. HON has surged 2.81% year-to-date (YTD).

Honeywell has a huge market capital of $91.12 billion. This comes with an impressive price to earnings (P/E) ratio of 19.18 and earnings per share (EPS) of 6.21.