Honeywell IR presents new forecast, alleviates crisis

NEW YORK: In the aftermath of an earnings warning that resulted in a stock plunge to a 52-week low in June, the IR pros at Honeywell International have stopped the bleeding.

NEW YORK: In the aftermath of an earnings warning that resulted in a stock plunge to a 52-week low in June, the IR pros at Honeywell International have stopped the bleeding.

NEW YORK: In the aftermath of an earnings warning that resulted in

a stock plunge to a 52-week low in June, the IR pros at Honeywell

International have stopped the bleeding.



The warning - that the company would come up a mere three cents per

share short of analysts’ predictions - came as a shock in large part

because CEO Michael Bonsignore assured investors all was well just two

weeks earlier.



’When (Bonsignore) attended that meeting, he didn’t have the May

numbers, so there was no reason to issue a warning,’ explained Honeywell

director of corporate media relations Tom Crane. ’Much of this was

self-inflicted. But rather than go to the Street with incomplete

numbers, Honeywell erred on the side of conservatism.’



Thomas Laughran, EVP of The Investor Relations Company, said that

Honeywell’s plight exemplifies the difficulty of communicating earnings

warnings in today’s harrowing financial climate.



’This year, companies are really getting punished harshly for

preliminary news and warnings,’ he said. ’Look, warning that you are

going to miss by a penny and then getting whacked by 12% is just not

fair.’



Still, many analysts and major investors later said that the market

reacted harshly due to Honeywell’s lack of communication rather than to

the somewhat disappointing profit picture. Caught unprepared by the

Street, the company’s IR pros withdrew, regrouped and came charging

back, pushing CEO Michael Bonsignore out front for the reputation

resuscitation.



Crane said the key to Honeywell’s communications strategy was a complete

and detailed revised forecast. The company brought the revised

financials public last Monday at an analysts’ meeting in New York -

timing that was criticized by many investors. Crane countered, ’July 10

was as fast as we could put everything together.’



Bonsignore stayed on point while addressing the gathering. ’We know what

happened, we have taken decisive action and we are committed to never

repeat this experience again,’ he said at the meeting. ’Honeywell is not

broken.’



In the wake of Honeywell’s roller-coaster ride, IR vets advised a

cautious and controlled approach during times of severe investor

backlash.



’When a company announces bad news, it has to expect some stock

erosion,’ said Ted Pincus, chairman and CEO of FRB/BSMG Worldwide. ’You

just have to direct the investor’s eye to the long-term potential.’



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