Honeywell International Inc. HON is scheduled to release fourth-quarter 2024 results on Thursday before market open.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

The Zacks Consensus Estimate for HON’s fourth-quarter revenues is pegged at $9.9 billion, indicating growth of 5.1% from the prior-year quarter’s figure. The consensus mark for earnings is pinned at $2.31 per share, which has edged down 8.3% in the past 60 days. The figure indicates a decline of 11.2% from the year-ago quarter's figure.

The company delivered better-than-expected results thrice and met estimates once in the trailing four quarters, the earnings surprise being 2.3% on average.  In the last reported quarter, its bottom line beat the consensus estimate by 3.2%.

Let us see how things have shaped up for Honeywell this earnings season.

Factors Likely to Shape HON’s Quarterly Performance

Strength across Honeywell’s commercial aviation aftermarket business, driven by strong demand in the air transport and business aviation markets, is expected to have supplemented the top-line performance of its Aerospace Technologies segment. Also, solid momentum in the company’s commercial aviation original equipment business, backed by an improvement in build rates and an increase in air transport hours, is likely to have augmented the segment’s performance.

Strength in the defense and space business, owing to stable U.S. and international defense spending volumes, is likely to have been a tailwind as well. We expect the segment’s revenues to increase 16.1% year over year to $4.3 billion in the fourth quarter.

The Energy and Sustainability Solutions segment is expected to have witnessed a year-over-year increase in revenues, driven by higher demand for specialty chemicals and fluorine products within the advanced materials business. Also, strength in the UOP business is likely to have augmented its top-line performance. Our estimate for the segment’s revenues is pegged at $1.7 billion, indicating a year-over-year increase of 3%.

Solid demand for its products and solutions, led by increasing building projects, particularly in India and Saudi Arabia, along with the acquisition of Global Access Solutions (in June 2024), is expected to have driven the Building Automation segment’s performance. We expect the segment’s revenues to increase 12.5% year over year to $1.7 billion in the fourth quarter.

However, Honeywell’s Industrial Automation Solutions segment is expected to have put up a weak show. Persistent weakness in the company’s warehouse and workflow solutions and sensing and safety technologies businesses, owing to lower demand for projects, is expected to have hurt the segment's top-line performance.

Also, continued softness in the warehouse automation business, owing to lower investments in the market, is likely to weigh on its results. For the fourth quarter, our estimate for revenues from the Industrial Automation segment is pegged at $2.5 billion, indicating a year-over-year decline of 2.5%.

High operating costs are likely to have posed a threat to HON’s bottom line. The company’s investments in digital infrastructure and business integration activities are expected to have pushed up its operating expenses, which are likely to have reflected in its margins.

HON has considerable exposure to overseas markets. Given its extensive presence in international markets, foreign currency headwinds are likely to have affected its top line.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Honeywell this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as elaborated below.

Earnings ESP: Honeywell has an Earnings ESP of -0.45% as the Most Accurate Estimate is pegged at $2.30 per share, lower than the Zacks Consensus Estimate of $2.31. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank of 3.

Stocks Likely to Beat Earnings Expectations

Here are three companies, which according to our model, have the right combination of elements to post an earnings beat in the upcoming release:

ITT Inc. ITT has an Earnings ESP of +0.14% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to release fourth-quarter results on Feb. 6. ITT’s earnings surpassed the Zacks Consensus Estimate thrice in the preceding four quarters while missing once, the average surprise being 2.1%.

Flowserve Corporation FLS has an Earnings ESP of +2.60% and a Zacks Rank of 3 at present. The company is slated to release fourth-quarter results on Feb. 18.

Flowserve’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark in one, the average surprise being 10.8%.

Stanley Black & Decker SWK has an Earnings ESP of +3.82% and a Zacks Rank of 3 at present. The company is slated to release its fourth-quarter 2024 results on Feb. 5.

SWK’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 18.6%.

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Honeywell International Inc. (HON) : Free Stock Analysis Report

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