Resideo Stock Drops 30% (Q3 2022)

By Donald Maye, Published Nov 03, 2022, 11:28am EDT (Info+)

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.

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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 ***** ***** *****:

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***** *******'* ***** *** ********** **** so *** **** ****, ******** ** the **** ******, ** *** ***** fine, ***** *********'* ******, ** *** chart ***** *****:

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***** ***** ****** ** ****, *** stock *** **** ** * ****** coaster, ****** ***** ****** **** *** nadir ** ***** $**, *** ***** is ***** ****** **** *** *** price:

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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 *** *** *******:

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*** ******* ********** ** *** *********** security ******** ******* (-**%), ****** ******* conversions ** ****** ** *** **** driver:

*** *********** ******** ******** *** **** headwinds ****** ******* ******, ********* ******* transition ** ******, *** ***-*** ** 3G ***** *********** *** ****** ******* activity ****** ** *** ***** ******** business. ** ****** ***** ****** ** remain ******* ******* ** ***** ***** 2023.

Resideo *******

***** *** ********* ** ******* ******* to ********, *** ***** **** ** the ******* ******** ********* ** **** problems. **** *** *****, **** ********** has **** *** ***** ********* *** two **. ** **** ******** *********, we ***** **** *********** **** ********.

Comments (2)

*******'* ***** ***** *** *** ********* the *** *****, **** ******** *******:

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**** ***** ****** **** *** **** business **** ************* ********** *** *************** ** ******** **********, the*********** *********** ***** **** **** *** **** flows, *** *** *** ******* *** companies ****. ******** *** **** **** spun ***. *'* **** **** **** survive, *** **'* *** ***** ** my *** ***** ** ********.

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