What to Look Out For When Honeywell International Reports Earnings

Honeywell International's (NYSE: HON) second quarter is shaping up to be a very interesting one for investors. In short, the company faces a mix of earnings headwinds and tailwinds, and it's hard to predict whether the net result will be a raising of the company's full-year guidance. Let's take a look at three key things to look out for when CEO Darius Adamczyk discusses current trading and outlook.

After a first quarter in which, according to Adamczyk, Honeywell "met or in most cases exceeded" management's guidance ranges across its segments, it was somewhat puzzling that the full-year guidance range was only raised by $0.05 at the bottom end, to between $6.90 and $7.10.

One of the reasons for such conservatism was management's caution regarding its short-cycle business, which is 60% of its total revenue, and typically exposed to current business sentiment. However, as you can see below, business-cycle indicators remain in growth mode, and there is no reason to expect weakness in the short-cycle business within the home and building technologies, safety and productivity solutions, and performance materials and technologies segments.

Source: Fool.com