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Alberto Abaterusso
Alberto Abaterusso
Articles (1711) 

3 Large Industrials Announce 1st-Quarter Results

Honeywell, Union Pacific and Dover beat expectations on earnings

April 18, 2019 | About:

These three large industrials announced first-quarter results for fiscal 2019 before the opening bell on Thursday.

Shares of Honeywell International Inc. (NYSE:HON) were up 1.3% to $165 in premarket trading on Thursday after the company beat consensus estimates on non-GAAP earnings by 8 cents, having posted $1.92 or 2% growth from the prior-year quarter.

Despite a 15% fall to nearly $8.9 billion due to spin-offs, sales beat analysts' expectations by $244 million.

However, organic sales went up 8% thanks to increases in all segments. The aerospace segment jumped 10% to $3.34 billion, home and building technologies increased 9% to $1.4 billion, performance materials and technologies went up 5% to $2.57 billion, and safety and productivity solutions increased 10% to $1.58 billion.

Honeywell also noted 120-basis-point growth in the segment margin to 20.4% due to higher sales volumes and operational improvements, a flat operating cash flow of $1.13 billion and a 15% jump in the adjusted free cash flow to $1.16 billion.

Honeywell now sees full-year 2019 earnings per share of $7.90 to $8.15 versus analyst consensus estimates of $7.98, and forecasts organic sales growth of 3-6% to $36.5 billion to $37.2 billion versus a $36.84 billion consensus. The company also raised the lower limit of adjusted free cash flow guidance to $5.5 billion to $6 billion, up from $5.4 billion to $6 billion.

Shares of Honeywell closed at $162.89 on Wednesday for a market capitalization of $118.64 billion. The stock climbed 15% over the 52 weeks through April 17 to above the 200-, 100- and 50-day simple moving average lines. The closing price on Wednesday was 32% above the 52-week low of $123.48 and 1.1% below the 52-week high of $164.65.

The 14-day relative strength index of 66.68 suggests the stock is neither overbought nor oversold.

The Peter Lynch chart suggests the stock is still priced fairly.

25eb9af0-61e3-11e9-8aa6-6d827df4196e.png

Wall Street issued an overweight recommendation rating for shares of Honeywell International with an average target price of $168.33. This rating means the stock is foreseen to outperform either the industry or the overall market within 52 weeks.

Union Pacific Corp. (NYSE:UNP) was up 0.63% to $170.34 per share in premarket trading on Thursday after posting GAAP earnings of $1.93 per share or 15% higher year-over-year, beating expectations by 6 cents.

Revenue declined 1.8% to $5.38 billion, missing consensus estimates by $120 million due to lower revenue carloads and declines in energy and agricultural products.

Union Pacific also recorded a 2% decline in quarterly freight revenue, a 1-point gain in the operating ratio to above 63%, a 3% decline in the average quarterly diesel fuel price to $2.07 per gallon and 1% increase in the operating income to $2 billion.

In the quarter, the Omaha, Nebraska-based railroad company repurchased 18.1 million shares for $3.5 billion.

Over the past 52 weeks, shares of Union Pacific Corp. increased 23% to a closing price of $162.89 on Wednesday for a market capitalization of $188.25 billion. The share price is trading above the 200-, 100- and 50-day simple moving average lines. The closing price on Wednesday was 34% above the 52-week low of $126.37 and nearly 2% below the 52-week high of $172.44.

The 14-day relative strength index of 57.9 suggests the stock is neither overbought nor oversold.

The Peter Lynch chart suggests the stock is cheap.

4eea4aa0-61e3-11e9-8487-01463c9738ed.png

Wall Street issued an overweight recommendation rating for shares of Union Pacific Corp. with an average target price of $178.63, or a 5.2% increase from the share price at close on Wednesday, within 52 weeks.

Shares of Dover Corp. (NYSE:DOV) were up 2.06% to $98.79 in premarket trading on Thursday after the company released non-GAAP earnings of $1.24 per share, up 38%, on revenue of $1.73 billion, up 5%. GAAP earnings increased 3% to 72 cents per share.

Dover Corp. beat expectations on non-GAAP earnings by 14 cents and on revenue by $40 million.

The printing and identification segment contributed 16.4%, or about $282.1 million, to total revenue. The fluids segment generated 40.8%, or about $703.2 million, and the refrigeration and food equipment segment added 19.4%, or roughly $334.6 million.

In 2019, Dover reaffirmed its expectations for adjusted earnings per share in the range of $5.65 to $5.85 versus consensus estimates of $5.72.

The stock was $96.8 at close on Wednesday for a market capitalization of $14.06 billion. Dover Corp. increased 26% over the 52 weeks through April 17 to above the 200-, 100- and 50-day simple moving average lines. The closing price on Wednesday was 47% above the 52-week low of $65.83 and 1.3% from the 52-week high of $98.02

The 14-day relative strength index of 62.81 suggests the stock is neither overbought nor oversold.

According to the Peter Lynch chart, the stock appears expensive.

77e80da0-61e3-11e9-866b-11cf921b40b8.png

Wall Street issued an overweight recommendation rating for shares of Dover Corp. with an average target price of $97.40 per share, which is 0.6% higher than the price at close on Wednesday. The stock is foreseen to outperform either the industry or the overall market within 52 weeks.

Disclosure: I have no positions in any securities mentioned.

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About the author:

Alberto Abaterusso
If somebody asks what being a value investor means, Alberto Abaterusso would answer, “The value investor is not just the possessor of the security that represents the company, but he is the owner of that company. As an owner of the company the value investor is actively involved in the dynamics of that company and his first concern is how to have sales progressively growing. Also, the value investor is probably one of the most demanding persons in the world concerning sales.”

Abaterusso is a freelance writer based in The Netherlands. He primarily writes about gold, silver and precious metals mining stocks. His articles have also been widely linked by popular sites, including MarketWatch, Financial Times, 24hGold, Investopedia, Financial.org, CNBS, MSN Money, Zachs, Reuters and others. Alberto holds an MBA from Università degli Studi di Bari (Italy), Aldo Moro.

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