Honeywell International Inc. announced on Monday that its board of directors has authorized the repurchase of up to $10 billion in stock, which includes approximately $2.1 billion that was remaining under the company’s prior buyback authorization. This latest authorization has no expiration date.
This announcement comes after the company reported third-quarter earnings last week. Honeywell reported a net income of $1.24 billion or $1.80 a share for the quarter, while earnings adjusted for one-time gains and costs were $1.90 a share. The results exceeded Wall Street expectations. Honeywell also reported that its revenue for the third quarter rose 6% to $10.76 billion, also surpassing Street forecasts.
The share repurchase program reflects Honeywell’s commitment to returning capital to its shareholders through a combination of dividends and share repurchases. It shows the company’s dedication to maintaining a disciplined approach to capital allocation, with investing in high return projects, acquisitions, and returning value to shareholders as key priorities.
“We are pleased that our strong balance sheet and free cash flow, enabled us to deploy over $8.1 billion to share repurchases since 2012, as well as significant investment in new technologies, strategic CapEx and attractive M&A, and growth in our dividend,” said Darius Adamczyk, President and CEO of Honeywell. “Our announcement allows us to maintain a flexible, opportunistic approach in optimizing shareholder value.”
Honeywell is a multinational conglomerate that produces electronic control systems and automation equipment for industrial and commercial clients worldwide, with an emphasis in the aerospace, automotive and energy sectors. Its products and services include aerospace systems, automation and control solutions, performance materials and technologies, and safety and productivity solutions.
The company’s history can be traced back to 1885 when Swiss inventor Albert Butz patented the furnace regulator and alarm. The company continued to grow and expand over the years, acquiring dozens of smaller companies and incorporating various technological innovations. Today, Honeywell is a Fortune 100 company with a 31% stake in NASDAQ-listed oil services company Baker Hughes.
In addition to the stock buyback announcement, Honeywell has also made other significant moves in recent months. The company completed the spinoff of its homes and ADI global distribution business, Resideo Technologies Inc., in October. The move is part of Honeywell’s strategy to focus on its core industrial and digital operations.
In September, Honeywell also announced plans to move its headquarters from Morris Plains, New Jersey to Charlotte, North Carolina. The move is expected to result in the creation of 750 jobs in Charlotte, as well as approximately 150 new jobs in other parts of the state.
Despite these moves, shares of Honeywell have been down 8% so far this year, as economic uncertainty has weighed on the company’s stock. However, with the continued push to return value to shareholders and focus on high-growth areas, Honeywell appears poised for future success.
The $10 billion in stock buyback authorization underscores Honeywell’s commitment to creating value for its shareholders, both in the short and long term. By strategically allocating capital to high return projects, acquisitions, and share repurchases, the company can invest in its future growth while also returning value to investors.
Overall, Honeywell’s commitment to maintaining a disciplined approach to capital allocation and returning value to shareholders is a positive sign for investors. The company’s recent focus on high-growth areas and strategic moves, such as the spinoff of its homes and ADI global distribution business and relocation of its headquarters, highlight its determination to improve its performance and position in the market.
As Honeywell continues to invest in new technologies, expand its global presence, and streamline its operations, the company appears well-positioned to deliver strong results in the coming years. Despite short-term challenges, the long-term outlook for Honeywell remains promising, with the potential for significant growth and returns for investors.
