Thread regarding Honeywell International Inc. layoffs

Layoffs will continue - Positive Earnings per Share (EPS) Surprises are Mandatory

I have posted in the past that expanding the gross profit margin was a key point in driving layoffs, etc. But review of the Zacks analysis posted at Yahoo Finance https://finance.yahoo.com/news/honeywell-hon-report-q2-earnings-122712875.html reveals something even more telling. Positive Earnings per Share (EPS) surprises appear to be Mandatory.

If you aren't familiar with the term, Wall Street analysts try to estimate what the EPS will be for each quarter and the year. Companies like Zacks collect many of these and try to create a consensus EPS number. Executives who are overly concerned about the stock price will try many things to beat the consensus number supposedly demonstrating that company is even better than the outside observers think it is.

According to Zacks, Honeywell has beat the consensus EPS every quarter starting with the 2nd one of 2016. I'm afraid that this has become the touchstone that Honeywell will try for indefinitely since it is a well known fact that companies that do not have positive surprises suffer significant drops in their stock price. (The company must be worse off than we think, say the outsiders.)

Since Honeywell can't control Sales/Revenue very much - "Honeywell is expected to have gained from its efforts to maximize productivity and operational excellence in the second quarter. Also, some of its actions during the second quarter, including the reduction of discretionary expenses, a hiring freeze and repositioning actions, are anticipated to have helped it maintain a healthy margin performance."

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Post ID: @OP+1659lypQ

5 replies (most recent on top)

Sure enough, 2Q results beat the estimates by five cents per share.

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Post ID: @1gyk+1659lypQ

So maximize productivity by RIFs and furloughs followed by mandatory overtime and forbidding vacations.

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Post ID: @bwi+1659lypQ

One correction: Honeywell hates all employees, except Sr executives and HR.....

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Post ID: @mxd+1659lypQ

@ogz you hit the nail on the head. Honeywell hates employees.

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Post ID: @mqi+1659lypQ

This is correct. As long as everyone who still works here remembers this mantra, they will be fine.

Stock price above all else. Above sustainability, above growth, above the company itself. If the company has to start imploding and cannibalizing itself to " make the numbers", then that's what it takes. Employees are not an asset in the sense of labor in; they're an asset in which to use to show higher revenue/margin after they're cut. Employees are ultimately a liability. HON doesn't want to pay you, your healthcare, or retirement. Essentially, working at HON is working for a company that hates you and wants to replace you or eliminate you at their earliest convenience and the compensation and benefits package is the least they could get away with giving you and still retaining your services.

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Post ID: @ogz+1659lypQ

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