Honeywell Chairman and CEO, Dave Cote, recently appeared on Bloomberg TV’s new show “Go”, sitting down with co-anchors David Westin and Erik Schatzker to discuss Honeywell’s 2016 outlook, which was released on Wednesday, December 16. Bloomberg’s “Go” draws upon the vast resources of Bloomberg—news, intelligence, data, analytics, reporters, experts, influencers, and decision-makers—to provide viewers with facts and perspectives they can’t get anywhere else.
During the interview, Cote’s comments extended the bullish messaging from Honeywell's conference call held yesterday with investors. Cote discussed the Federal Reserve rate increase, Honeywell's cash management and deployment, and the Company’s plans for continued outperformance in earnings growth. Cote also commented on Honeywell’s plans to support growth where it can be found globally, particularly in high-growth regions, higher defense spending, and in the Company's Performance Materials and Technologies business.
Confirming Honeywell’s continued interest in acquiring, Cote stated the importance of software and the need for diversity of opportunity so that “there’s not one thing that makes the business, but there’s not one thing that’s going to kill the Company either.” He explained that the building of cash has allowed Honeywell to be both flexible and opportunistic, allowing acquisitions to happen more swiftly having cash on hand. Although Honeywell’s shares remain undervalued in the market versus our peer group, Cote is optimistic that profitability and earnings per share will steadily increase in 2016. As noted by Bloomberg, Honeywell has outperformed the S&P and the S&P Index by 38% in the past five years, including all dividends being reinvested.
When discussing Honeywell’s conservative 2016 sales guidance in what he expects will continue to be a slow-growth global economy, Cote stated, “We do a lot of what I’ve referred to as ‘seed planting’. So, whether it’s investing in new geographies or new products, it’s the process work that we do that’s allowing us to be successful today. If you take a look at the difference between our performance pre-recession and post-recession, pre-recession we did a lot of that seed planting, cause nobody had ever really done it. So we had to pile a lot of money into new products, new geographies, and process work. We’re reaping the benefit of that now and still doing the seed planting that we need for the next 5 years.”