Jim Cramer: Honeywell Earnings Worth Watching After Layoffs

Honeywell's solid earnings run could come to an end after confirmation of layoffs.
By Keris Alison Lahiff ,

Honeywell's (HON) - Get Report solid earnings run could come to an end after confirmation of layoffs. 

"The 'Fill or Kill' team [at RealMoney] confirmed last night that there are going to be layoffs at Honeywell. That really matters," said Jim Cramer, portfolio manager of the Action Alerts PLUS Charitable Trust, duringan interview at the New York Stock Exchange on Wednesday. "You should know that heading into the Honeywell quarter given the fact that Honeywell has been on an amazing tear."

The aerospace and defense company confirmed late Tuesday that it plans to implement a "small reduction of positions ... to better align our costs with current demand." Layoffs will be focused on the aerospace division.

Honeywell is not the only one struggling with weaker demand in aerospace. Boeing (BA) - Get Report  recently cut 4,500 workers as of the end of June, according to a Wall Street Journal report. The company also reduced its rougly 5,700-position flight testing unit by about 10%.

The aerospace industry has seen a recent downturn with Airbus and Boeing orders at the Farnborough Airshow in England this year nearly half their total in 2014, according to Canaccord. 

Honeywell is due to report earnings on Friday morning. Analysts expect net income of $1.26 billion, or $1.64 a share, according to Thomson Reuters. That compares to $1.19 billion, or $1.51 a share, a year earlier. Revenue is expected to climb 3.6% to $10.13 billion. 

The company has surpassed analysts' profit estimates for every earnings season since the second quarter of 2014. 

Loading ...