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3 Large Industrials Announce 1st-Quarter Results

- By Alberto Abaterusso

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

Shares of Honeywell International Inc. (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.

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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. (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.

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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. (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.

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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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This article first appeared on GuruFocus.