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Was Honeywell International Inc.'s (NYSE:HON) Earnings Decline Part Of A Broader Industry Downturn?

Simply Wall St

In this commentary, I will examine Honeywell International Inc.'s (NYSE:HON) latest earnings update (31 December 2019) and compare these figures against its performance over the past couple of years, as well as how the rest of the industrials industry performed. As an investor, I find it beneficial to assess HON’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time.

See our latest analysis for Honeywell International

Commentary On HON's Past Performance

HON's trailing twelve-month earnings (from 31 December 2019) of US$6.1b has declined by -9.2% compared to the previous year.

Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 4.8%, indicating the rate at which HON is growing has slowed down. Why is this? Well, let’s take a look at what’s transpiring with margins and whether the whole industry is feeling the heat.

NYSE:HON Income Statement, February 18th 2020

In terms of returns from investment, Honeywell International has invested its equity funds well leading to a 33% return on equity (ROE), above the sensible minimum of 20%.

What does this mean?

Though Honeywell International's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. I recommend you continue to research Honeywell International to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for HON’s future growth? Take a look at our free research report of analyst consensus for HON’s outlook.
  2. Financial Health: Are HON’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2019. This may not be consistent with full year annual report figures.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.