How sweet is this Honey

Nitesh is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.


Honeywell International (NYSE: HON), a diversified technology and manufacturing company worldwide will pay $600 million, i.e. $10 per share, to purchase Intermec, a mobile computing device maker. Honeywell’s lower-than-expected profits have partially been attributed to the cost of this acquisition. However the company has still reported a quarterly revenue growth of 0.50%, year-over-year, for the quarter ended Sept. 30 and EPS of $2.99 over the trailing twelve months. Recently the CEO of the company, Dr. Rajeev Gautam, has received the 2012 Chemical Engineering Personal Achievement Award from the Chemical Engineering magazine.

Down the Line Prospects

Honeywell International is partnering with the Department of Homeland Security to develop a device that can capture the identities of entire crowds via retinal scans. Honeywell expects its sales from its existing operations to rise by 1 percent to 3 percent next year. While it's planning for slow growth conditions, the company will remain flexible and focus on boosting its efficiency and competitiveness with the goal of increasing sales and profitability. Further Honeywell has elected General Motors Co.’s executive Grace Lieblein to its board of directors. She was responsible for annual revenue of $12 billion in General Motors and hence her experience makes her a good fit for the company.

Glimpse on the others

There's nothing like a little competition to stir up innovation. For ages, Honeywell controlled the thermostat market and hence it never worried about building buzz for its products. But then Nest Labs, which started selling new thermostats with features that Honeywell stood behind in, as a result of which now Honeywell is promising more innovation.

Johnson Controls (NYSE: JCI), provider of power solutions businesses worldwide, plans to lay off 392 workers at its Johnson Controls Interior Manufacturing site. The layoff stems from the company’s decision to close the plant in order to get rid of excess capacity in its interiors business. Johnson Controls has recently acquired the assets of lithium-ion battery maker A123 Systems. This acquisition will help to strengthen its existing portfolio and help it to maintain the market leading position. Johnson’s revenues for the current quarter decreased from 3.6% to $10.4 billion. It has not provided any specific guidance for fiscal 2013 and expects that earnings in the first half of fiscal 2013 will be lower than the year ago period due to weak end markets and adverse effects of foreign currency and hence pose a less threat for Honeywell in days to come.

United Technologies (NYSE: UTX) provides technology products and services to the building systems and aerospace industries worldwide. It published disappointing outlook for the full year of 2013. For the coming year the company expects earnings per share to increase between 10% to 16%, i.e. in between $5.85 and $6.15 per share. Sales are expected to grow in between 10% to 12% as a result of the acquisition of Goodrich and hence Honeywell is subject to active competition in substantially all product and service areas with United Technologies.

Bottom Line

With good leadership and stable management, Honeywell continues not only to survive, but thrive. A new and focused Honeywell has emerged from the turbulence of five years ago and has a long way to go. The shares of Honeywell are fairly valued and do offer long term potential. Adding it to your portfolio will bear fruit in the years to come.



Niteshag has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend General Motors Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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