Resideo Stock Drops 30% (Q3 2022)
Resideo's stock dropped more than 30% the day after it missed expectations and lowered guidance. The provider of Honeywell Homes and owner of ADI has struggled again and again in the 4 years since it went public / spun out of Honeywell.
Inside this note, we examine Resideo's Q3 performance, the impact on its full-year outlook, ADI's (positive) performance, and the outlook for Resideo going forward.
*******, "*********** ********" ***** **** **** 21% ****** **** ** ** *** Home ****, ******** **** ***.
Outlook Revised ** ** ******** ****
**************** * ********** *** ****-**** ******* ***** ** lower ******* *** ****** ***********. **** though */**** ** *** **** ** already ****, **** **** ******* ***** guidance *** *** ****:
***** ** *** ******* ******* *** the ****** *******, *** ******* *** expects **** **** **** *evenue ** ** ** *** ***** ** $*.** ******* ** $*.** *******, gross profit margin in the range of 27.0% to 28.0% and operating profit ** *** ***** ** $*** ******* ** $*** *******. [emphasis added]
******,******* ********* ** *** ** ******* call******* (+$***-$****) *** ******* (+$**-$***) ************* higher **** *** ****** *******:
***** ** ***** **** ******* *** the ******* *** *** ********* ** 2022, *** ******* ******* **** **** 2022revenue ** ** ** *** ***** ** $*.** ******* ** $*.** *******, gross profit margin in the range of 27.5% to 28.5% and operating profit ** *** ***** ** $*** ******* ** $*** *******. [emphasis *****]
**** ** ****** ****** ** ********, this **** ** *** ****, ********* significant ******** ********.
Stock *******
****, *** ***** **** *******, ******* yesterday **** ************* *** ******* **** further, ****** * ******* ******* ** market **************, ******* **** ~$*.* ******* market ************** ** $*.* *******, ** the ***** ***** *****:
***** *******'* ***** *** ********** **** so *** **** ****, ******** ** the **** ******, ** *** ***** fine, ***** *********'* ******, ** *** chart ***** *****:
***** ***** ****** ** ****, *** stock *** **** ** * ****** coaster, ****** ***** ****** **** *** nadir ** ***** $**, *** ***** is ***** ****** **** *** *** price:
ADI *********** *****
***** ******* ********** ***'* *********** ** solid, ** ***** ** *** ******, at ****.
******* *********** ***'* ******* ****** *** profit ********* ** * ********, ****** its ******** *** **** ********:
*** ***** ********* ***** ******* ****** and ****** *********, ****** **strong *********** ** ******** *** **** **********, serving commercial markets. [emphasis added]
******* ********* **** *** ******* ($****) was ** *% ** **, **** positive ****** ******** *** **** *** categories:
** ***, ******* **** *% ** the ***** ******* ****** ** ********** sales ** ***** ******* ** **** and ***** ************. ****** ********** ****** positive ****** **** ** **** **********
*% ** *** ****** *** **** was ********* ** *.* ********** ****** of **** ****** **** **** * recent ************ *** ****** ** * 2 ********** ****** ******* **** ******* exchange ************:
*** *** ************ **'** ********* ** ADI ***** *** ********* ** *** second ******* ** **** ***** ************* 170 ***** ****** ** ******* ****** in *** *******. ******* ******** ******* revenue ****** ** ************* *** ***** points ******** ** *** ***** ****.
********, **** ******** **** ****** ******** continue:
****** *********** ** ******** ******* ********** restrained *** ******* ****** ** ** and *** ******** ** ****** * challenge ** *** ****** ****.
ADI *-******** *** ******* ****** ***** **********
*** ********** **** *-******** *** ******* labeling (*.*., *-***) **********:
*-******** ***** **** ** **% ****-****-****, accounting *** **% ** ***** *** revenue **** ********* ******* ***** ******** 36% ** *******. ******* ****** ******* grew ** **** **% ** *** quarter
Gross ******* *** *****
*** ************ ******** ****** ** **** ADI's ***** ******* ******:
*** ***** ****** ** *** ****** quarter *** ***** ****** ** **%, up **** **.*% **** ****, ********** improved ******* **** ******, ********* ******* brands ************ *** *** ****** ******* environment
******* ** ******* *** **% *** gross ******* ** ****** *** *** norm, *********** **** "*** ********* *** 2024 *** *** *** ***** ******* in **** **% *****".
Honeywell **** ********
******* ******** ******** **** ***** ******** & ********* *******:
** *** ***** ******* **********, ** saw ******-****-******** ****** *** ***** ****** Products & *********, **** ********* ******* to ********* ********* ****** ** ***** uncertainty *****.
******** & ********* *** ******* ******** Resideo ***, *********** ********, *** ****** businesses. ***** ******* ** **** ******* was ** *******, ** *** ****** by ************** ** ***** ******** *** ********** ******* ********* ** $112M *** *** *******:
*** ******* ********** ** *** *********** security ******** ******* (-**%), ****** ******* conversions ** ****** ** *** **** driver:
*** *********** ******** ******** *** **** headwinds ****** ******* ******, ********* ******* transition ** ******, *** ***-*** ** 3G ***** *********** *** ****** ******* activity ****** ** *** ***** ******** business. ** ****** ***** ****** ** remain ******* ******* ** ***** ***** 2023.
Resideo *******
***** *** ********* ** ******* ******* to ********, *** ***** **** ** the ******* ******** ********* ** **** problems. **** *** *****, **** ********** has **** *** ***** ********* *** two **. ** **** ******** *********, we ***** **** *********** **** ********.
**** ***** ****** **** *** **** business **** ************* ********** *** *************** ** ******** **********, the*********** *********** ***** **** **** *** **** flows, *** *** *** ******* *** companies ****. ******** *** **** **** spun ***. *'* **** **** **** survive, *** **'* *** ***** ** my *** ***** ** ********.
*******'* ***** ***** *** *** ********* the *** *****, **** ******** *******: