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Europe as Expected
Shannon O’Callaghan – Nomura: On the short cycle, Europe component of it, I mean, can you give a little color on how you saw that progress through the quarter, month-by-month and maybe into July, I mean, have you seen things get worse in the last month or two?
David J. Anderson – SVP and CFO: I would say it’s been pretty consistent, Shannon, in terms of the rate of change there. In turbo we saw what I call — a fairly just steady erosion of the order rates but in line really with what we expected. So Shannon I would say really it’s kind of played out as we expected as we talked to you at the end of the first quarter.
A Closer Look: Honeywell Earnings Cheat Sheet>>
David M. Cote – Chairman and CEO: We never expected much as you know Shannon and fortunately we plan for it, unfortunately it worked just the way we expected.
Shannon O’Callaghan – Nomura: Then on the, one of your low end components of the guidance framework, I mean you talked about project delays as a risk at UOP either there or I guess elsewhere have you seen any evidence of people kind of putting things on hold given the current macro and how is that factored in?
David M. Cote – Chairman and CEO: No, not yet. But we certainly don’t want to preclude the possibility that it could happen. So we just wanted to factor that into our thinking. But we haven’t seen it yet.
David J. Anderson – SVP and CFO: We’ve seen Shannon – to just add to Dave’s point, we’ve seen continued strong activity I’ve referenced the strong orders and backlog for UOP. So, knock on woods those projects will be financed and we’ll execute against those, but the overall macro has continued to be very favorable in that business.
David M. Cote – Chairman and CEO: The new stuff that they’ve been developing helps also. I mean you’ve heard Andreas talk about some of the wins that we’ve been able to have. I mean the new technologies are making a big difference there.
Elena Doom – VP, IR: Maybe to just build on that the book-to-bill ratio at the end of the second quarter was 1.6. So record backlog at UOP of $2.l million.
David M. Cote – Chairman and CEO: You’re hosting…
Elena Doom – VP, IR: UOP Investor Day.
David M. Cote – Chairman and CEO: Was that August 1 and 2?
Elena Doom – VP, IR: Yeah.
Shannon O’Callaghan – Nomura: Are you seeing sort of similar positive trends in the process business?
David M. Cote – Chairman and CEO: Process backlog is also doing well.
Elena Doom – VP, IR: Up 10% on a year-over-year basis organically.
Shannon O’Callaghan – Nomura: The orders too look good?
Elena Doom – VP, IR: Orders up 10% as well.
Jeffrey Sprague – Research Partners: Dave you mentioned that margins are trending better than expected and obviously a lot of what you’ve been doing to improve margins has been ongoing for a while, the restructuring, now the comp change. Is there anything in particular though that’s jumping out to you that’s actually driving the better performance is it better drop through on restructuring, is it mix of their, is it just everybody is pulling the orders in the same way better than they used to, is there anything that kind of stands out?
David M. Cote – Chairman and CEO: I’d point to two things one is we’re doing the stuff that we always did and lot of that seed plantings finally does come through at some point where there its restructuring work that you’ve done, the new higher margin products that we’ve invested in that all works. The second thing is I would say having the putting in the growth plan the way we did and making margin rate – one of the components of it. That certainly helped to get everybody’s attention and focus even more on lot of that — didn’t make it sure that we got the result of all that seed planting that we did. And of course important thing to do is that make sure that we are still investing for the future doing that seed planting that’s going to make sure that we make not just this year but next year the year after et cetera. I think all of that together helped, to really just kind of take it up a notch.
Elena Doom – VP, IR: If I could add for PMT I think we did see some favorable mix in UOP driven by some record level licensing and stronger petrochemical catalyst sales in the quarter which contributed nicely to the margin.
David J. Anderson – SVP and CFO: But I would say in terms of the fundamental changes Jeff I think the things I was referencing are that overall drivers and why you can continue to expect that.
Jeffrey Sprague – Research Partners: Could you elaborate a little bit on the comment on China, everybody is really kind of reading the t-leaves here for any sign of stabilization, or inflection one way or the other, how convincing was it or important was it in your view, what kind of follow through are you seeing seen?
Elena Doom – VP, IR: For us China (NYSE:ROB) as you know has been a focal point for 10 years and we — I think we started off from a weaker position as you know, but we’ve been accelerating rapidly and we’ve got about 12,000 people there now, there will be opportunity for us to just continue growing. Starting with the macroeconomic side, yeah, they are going through some difficulties now but at the end of the day GDP is still growing pretty well and we are able to — given our low shares I think continue to just grow very well, and you saw that in the first quarter, second quarter we expect that will continue. I am one of the guys who believes that China is going to continue to make right decisions. They’ll have their ups and downs of course. They are kind of going through a down now. But overall we expect that China is going to continue to do well and that we’ll do well within that macroeconomic framework that they are developing. I think you got to bet on them. Historically they have made the right decisions. And I think you’d continue to see them doing that now whether it’s how they talk about the SOE’s, what they talk about in banking, what they try to do to manage the real estate inflation that they’ve seen I think that you should bet on them not against them.
David J. Anderson – SVP and CFO: Maybe just to add a little bit, given the importance of it, Jeff just a couple of numbers which I think help. We had mentioned, David mentioned the growth that we experienced in the second quarter 12% organic, its 14% for the first half and what we’ve seen, and the theme has really been or the underlying factors there it really been continued strength in our long cycle businesses. So that’s again really reflective of those favorable macros and the business positioning that we’ve done and the investments that we’ve done in terms of globalization that we’ve made. The second thing is that we saw sequential improvements, one quarter to second quarter in our short cycle businesses in nearly every one of our businesses and we also saw some notable pickups in other trends, but we saw notable pickup in June and we’ve seen and in discussions with our business leaders they are seeing clear evidence of anywhere you could call it either stabilization or improvement in terms of what they’re seeing in terms of their markets. So we think that we’ve got it prudently planned for the second half, but today’s point, it really viewed more over time and from a macro standpoint this is going to be — continue to be huge opportunity for Honeywell and becoming the Chinese competitor, executing like we are with our technologies to deal with a macro trends, that there are favorable macro trends that will continue to play out there, I think that’s the way you want to look at.
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