Core Viewpoint - Resideo Technologies, Inc. has completed a $1.59 billion buyout to end its indemnification with Honeywell International Inc., which is expected to enhance earnings clarity and facilitate the planned separation of ADI Global [1][5]. Group 1: Financial Performance - Resideo reported strong second-quarter results, exceeding guidance and achieving the highest organic growth in 15 quarters, along with a ninth consecutive increase in P&S gross margins [2]. - The analyst projects Resideo's non-GAAP EPS for 2026 to be $3.02, approximately 23% above consensus estimates, driven by the removal of the Honeywell indemnification [3]. Group 2: Structural Changes - The termination of the Honeywell indemnity, which required annual cash payments of $140 million until 2043 for an unrelated environmental liability, is seen as a significant structural change that alleviated a burden on the company [4]. - The buyout was financed with about $400 million in cash and approximately $1.2 billion in debt, which is expected to add an estimated 40 cents to annual non-GAAP EPS, reflecting a transformational impact on the company's financial outlook [5][6]. Group 3: Market Reaction - Following the announcement, Resideo's shares increased by 14.02%, reaching $31.33, indicating positive market sentiment regarding the company's future prospects [6].
Resideo Technologies Pops As Honeywell Indemnity Buyout Boosts Growth Story