(Photo Credit: Honeywell International)
Manufacturers promised that tax reform would encourage businesses to invest more of their money into the United States. We’ve already seen it from Home Depot, AT&T, Wells Fargo, Disney and others. Another manufacturer is now joining the list.
U.S. industrial manufacturer Honeywell International announced last week that the company plans to take advantage of the historic new tax law and repatriate at least $7 billion in cash held overseas back to the United States.
Honeywell said the cash will be used to bolster the company’s core operations:
U.S. industrial conglomerate Honeywell International Inc. (HON.N) said on Friday that it expected to bring back at least $7 billion of the $10 billion in cash held overseas in the next two years, taking advantage of the newly enacted tax law.
The cash hoard will help fuel Honeywell’s M&A strategy under new Chief Executive Darius Adamczyk, who is looking to bolster its core operations, such as aerospace, following the spinoff its home and transportation businesses later this year.
The company also plans to invest some of the cash to increase 401(k) pension contributions for its U.S. employees. Honeywell added that it is seeing additional benefits from the new tax law, noting that its customers’ confidence is increasing along with their cash-on-hand:
Honeywell also raised its 2018 earnings forecast and said it was seeing a greater level of confidence from its customers, who may now have more cash on hand to spend due to the new tax law.
“Their capex is our revenue, and we do expect some level of investment to accelerate (later in 2018),” Adamczyk said on a conference call.
Honeywell International produces a variety of commercial and consumer products, engineering services and aerospace systems and employs more than 130,000 workers, including 21,000 engineers and scientists.
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