HONEYWELL DELIVERS STRONG SECOND QUARTER RESULTS AND BEATS EARNINGS GUIDANCE; UPDATES 2024 OUTLOOK
Honeywell (NASDAQ: HON) reported strong Q2 2024 results, beating earnings guidance and updating its 2024 outlook. Key highlights include:
- Sales of $9.6 billion, up 5% reported and 4% organic
- Earnings per share of $2.36, adjusted EPS of $2.49 (up 8% YoY)
- Orders up 4%, led by building automation and energy solutions
- Deployed $6.4 billion in capital, including $5 billion Access Solutions acquisition
- Updated full-year guidance: Sales $39.1-39.7 billion, organic growth 5-6%, adjusted EPS $10.05-10.25
Strong performance was driven by Aerospace Technologies, with 16% organic growth. The company is aligning with megatrends in automation, aviation, and energy transition.
Honeywell (NASDAQ: HON) ha riportato risultati solidi per il secondo trimestre del 2024, superando le previsioni di guadagno e aggiornando le sue previsioni per il 2024. I principali punti salienti includono:
- Vendite di 9,6 miliardi di dollari, in aumento del 5% rispetto all’anno precedente e del 4% in termini organici
- Utile per azione di 2,36 dollari, utile per azione rettificato di 2,49 dollari (in aumento dell'8% su base annua)
- Ordini in aumento del 4%, guidati da automazione degli edifici e soluzioni energetiche
- Impiegati 6,4 miliardi di dollari in capitale, inclusa l'acquisizione di Access Solutions per 5 miliardi di dollari
- Aggiornamento delle previsioni per l'intero anno: Vendite da 39,1 a 39,7 miliardi di dollari, crescita organica del 5-6%, utile per azione rettificato da 10,05 a 10,25 dollari
Le solide performance sono state alimentate dalle tecnologie aerospaziali, con una crescita organica del 16%. L'azienda si sta allineando con le megatendenze in automazione, aviazione e transizione energetica.
Honeywell (NASDAQ: HON) reportó resultados sólidos para el segundo trimestre de 2024, superando las expectativas de ganancias y actualizando su perspectiva para 2024. Los puntos clave incluyen:
- Ventas de 9.6 mil millones de dólares, un aumento del 5% reportado y del 4% orgánico
- Ganancias por acción de 2.36 dólares, EPS ajustado de 2.49 dólares (aumento del 8% interanual)
- Órdenes en aumento del 4%, lideradas por automatización de edificios y soluciones energéticas
- Desplegó 6.4 mil millones de dólares en capital, incluida la adquisición de Access Solutions por 5 mil millones de dólares
- Actualización de la guía para el año completo: Ventas de 39.1 a 39.7 mil millones de dólares, crecimiento orgánico del 5-6%, EPS ajustado de 10.05 a 10.25 dólares
El sólido rendimiento fue impulsado por las Tecnologías Aeroespaciales, con un crecimiento orgánico del 16%. La empresa se está alineando con las megatendencias en automatización, aviación y transición energética.
하니웰 (NASDAQ: HON)은 2024년 2분기 실적이 매우 뛰어나다고 보고했습니다, 예상 수익을 초과 달성하였고 2024년 전망을 업데이트하였습니다. 주요 하이라이트는 다음과 같습니다:
- 96억 달러의 매출, 보고된 기준으로 5%, 유기적으로 4% 증가
- 주당 순이익 2.36달러, 조정 주당 순이익 2.49달러 (전년 대비 8% 상승)
- 주문량 4% 증가, 빌딩 자동화 및 에너지 솔루션이 주도
- 64억 달러를 자본으로 투입했으며, 여기에는 50억 달러 규모의 Access Solutions 인수 포함
- 연간 전체 가이드라인 업데이트: 매출 391-397억 달러, 유기적 성장 5-6%, 조정 주당 순이익 10.05-10.25달러
강력한 성장은 항공우주 기술에 의해 주도되었으며, 16%의 유기적 성장률을 기록했습니다. 회사는 자동화, 항공 및 에너지 전환의 메가트렌드에 맞춰 조정하고 있습니다.
Honeywell (NASDAQ: HON) a annoncé des résultats solides pour le deuxième trimestre de 2024, dépassant les prévisions de bénéfices et mettant à jour ses perspectives pour 2024. Les points saillants incluent :
- Ventes de 9,6 milliards de dollars, en hausse de 5% rapporté et 4% organique
- Bénéfice par action de 2,36 dollars, BPA ajusté de 2,49 dollars (en hausse de 8% par rapport à l’année précédente)
- Commandes en hausse de 4%, dirigées par l’automatisation des bâtiments et les solutions énergétiques
- 6,4 milliards de dollars déployés en capital, y compris l’acquisition d’Access Solutions pour 5 milliards de dollars
- Mise à jour des prévisions annuelles : ventes de 39,1 à 39,7 milliards de dollars, croissance organique de 5 à 6 %, BPA ajusté de 10,05 à 10,25 dollars
Cette performance solide a été principalement due aux technologies aérospatiales, avec une croissance organique de 16 %. L’entreprise s’aligne sur les mégatendances dans les domaines de l’automatisation, de l’aviation et de la transition énergétique.
Honeywell (NASDAQ: HON) hat starke Ergebnisse für das 2. Quartal 2024 gemeldet, die die Gewinnprognosen übertroffen haben, und hat seinen Ausblick für 2024 aktualisiert. Wichtige Highlights sind:
- Umsatz von 9,6 Milliarden US-Dollar, 5% im Bericht und 4% organisch gestiegen
- Gewinn pro Aktie von 2,36 USD, bereinigter Gewinn pro Aktie von 2,49 USD (8% im Jahresvergleich gestiegen)
- Bestellungen um 4% gestiegen, angeführt von Gebäudeautomation und Energielösungen
- 6,4 Milliarden US-Dollar an Kapital investiert, einschließlich der Akquisition von Access Solutions für 5 Milliarden US-Dollar
- Aktualisierte Jahresprognose: Umsatz von 39,1 bis 39,7 Milliarden US-Dollar, organisches Wachstum von 5-6%, bereinigter Gewinn pro Aktie von 10,05 bis 10,25 US-Dollar
Die starke Leistung wurde von der Luftfahrttechnik getragen, mit einem organischen Wachstum von 16%. Das Unternehmen passt sich den Megatrends in der Automatisierung, der Luftfahrt und dem Energiewandel an.
- Q2 sales grew 5% to $9.6 billion, with 4% organic growth
- Adjusted EPS of $2.49, up 8% year-over-year and above guidance
- Aerospace Technologies sales increased 16% organically
- Orders up 4%, led by building automation and energy solutions
- Deployed $6.4 billion in capital, including major acquisitions
- Updated full-year guidance with higher sales and organic growth expectations
- Industrial Automation sales decreased 8% organically
- Building Automation segment margin contracted 60 basis points to 25.3%
- Full-year segment margin guidance lowered to 23.3%-23.5% from previous 23.8%-24.1%
- Adjusted EPS growth guidance lowered to 6%-8% from previous 7%-10%
- Operating cash flow guidance lowered to $6.6-$7.0 billion from $6.7-$7.1 billion
Honeywell's Q2 2024 results demonstrate solid performance amid challenging market conditions. The company reported 5% year-over-year sales growth to
Key highlights include:
- Strong performance in Aerospace Technologies, with 16% organic sales growth
- Building Automation showing signs of recovery with 10% sequential growth
- Energy and Sustainability Solutions demonstrating resilience with 3% organic growth
- Industrial Automation facing headwinds with an 8% organic sales decline
The company's capital deployment strategy is noteworthy, with
Honeywell has updated its full-year 2024 guidance, reflecting confidence in its outlook:
- Sales forecast increased to
$39.1-39.7 billion - Organic sales growth projection raised to
5-6% - Adjusted EPS guidance slightly lowered to
$10.05-10.25
While the company faces some challenges, particularly in Industrial Automation, its diversified portfolio and strategic focus on automation, aviation and energy transition position it well for future growth.
Honeywell's Q2 results offer valuable insights into broader market trends:
- Aerospace sector resilience: The 16% organic growth in Aerospace Technologies, marking the eighth consecutive quarter of double-digit growth, underscores the robust recovery in commercial aviation and sustained demand in defense.
- Industrial sector challenges: The 8% organic decline in Industrial Automation reflects ongoing headwinds in manufacturing and warehousing, potentially signaling broader economic pressures.
- Building solutions momentum: The 14% organic growth in building solutions indicates a strong market for energy efficiency and building management technologies, likely driven by sustainability initiatives and return-to-office trends.
- Energy transition opportunities: The 3% organic growth in Energy and Sustainability Solutions, particularly the 8% growth in advanced materials, highlights ongoing investments in cleaner energy technologies.
Honeywell's strategic acquisitions, totaling
The company's updated guidance, while showing confidence in sales growth, also reflects some caution on margins and earnings. This could indicate broader market uncertainties and inflationary pressures affecting the industrial sector as a whole.
Investors should monitor Honeywell's performance as a potential bellwether for trends in industrial technology, aerospace and energy markets.
- Sales of
, Reported Sales Up$9.6 Billion 5% , Organic1 Sales Up4% , Achieving the High End of Previous Guidance - Earnings Per Share of
and Adjusted Earnings Per Share1 of$2.36 , Above High End of Previous Guidance$2.49 - Orders Up
4% , Led by Strength in Our Building Automation and Energy and Sustainability Solutions Businesses - Deployed
of Capital to M&A, Dividends, Share Repurchases, and Capital Expenditures, Including Closing the$6.4 Billion Acquisition of Access Solutions, and Announcing the$5 Billion Acquisition of CAES Systems Holdings and the$1.9 Billion Acquisition of Air Products' LNG Business$1.8 Billion
The company reported second-quarter year-over-year sales growth of
"Honeywell delivered a strong second quarter, once again meeting or exceeding guidance across all metrics while maneuvering through a dynamic operating environment," said Vimal Kapur, chairman and chief executive officer of Honeywell. "While Aerospace continues to lead our growth, we are seeing broader participation across our portfolio, with three of our four segments contributing positive growth for the quarter. All four segments grew sequentially in the quarter as well, giving us further confidence in our expectation of a second half organic growth acceleration."
Kapur continued, "We also made significant progress in our capital deployment strategy, deploying
As a result of the company's second-quarter performance and management's outlook for the remainder of the year, including the impact of recently announced acquisitions, Honeywell updated its full-year sales, segment margin2, adjusted earnings per share2,3, and cash flow1 guidance. Full-year sales are now expected to be
Second-Quarter Performance
Honeywell sales for the second quarter were up
Aerospace Technologies sales for the second quarter increased
Industrial Automation sales for the second quarter decreased
Building Automation sales for the second quarter increased
Energy and Sustainability Solutions sales for the second quarter grew
Conference Call Details
Honeywell will discuss its second-quarter results and full-year 2024 guidance during an investor conference call starting at 8:30 a.m. Eastern Time today. A live webcast of the investor call as well as related presentation materials will be available through the Investor Relations section of the company's website (www.honeywell.com/investor). A replay of the webcast will be available for 30 days following the presentation.
TABLE 1: FULL-YEAR 2024 GUIDANCE2 | ||||
Previous Guidance | Current Guidance | |||
Sales | ||||
Organic1 Growth | ||||
Segment Margin | ||||
Expansion | Up 30 - 60 bps | Down 20 - Flat bps | ||
Adjusted Earnings Per Share3 | ||||
Adjusted Earnings Growth3 | ||||
Operating Cash Flow | ||||
Free Cash Flow1 |
TABLE 2: SUMMARY OF HONEYWELL FINANCIAL RESULTS | ||||||
2Q 2024 | 2Q 2023 | Change | ||||
Sales | 5 % | |||||
Organic1 Growth | 4 % | |||||
Operating Income Margin | 20.7 % | 20.6 % | 10 bps | |||
Segment Profit1 | 4 % | |||||
Segment Margin1 | 23.0 % | 23.1 % | -10 bps | |||
Earnings Per Share | 6 % | |||||
Adjusted Earnings Per Share1 | 8 % | |||||
Operating Cash Flow | 1 % | |||||
Free Cash Flow1 | (1 %) |
TABLE 3: SUMMARY OF SEGMENT FINANCIAL RESULTS | ||||||
AEROSPACE TECHNOLOGIES | 2Q 2024 | 2Q 2023 | Change | |||
Sales | 16 % | |||||
Organic1 Growth | 16 % | |||||
Segment Profit | 14 % | |||||
Segment Margin | 27.2 % | 27.8 % | -60 bps | |||
INDUSTRIAL AUTOMATION | ||||||
Sales | (8 %) | |||||
Organic1 Growth | (8 %) | |||||
Segment Profit | (12 %) | |||||
Segment Margin | 19.0 % | 19.9 % | -90 bps | |||
BUILDING AUTOMATION | ||||||
Sales | 4 % | |||||
Organic1 Growth | 1 % | |||||
Segment Profit | 2 % | |||||
Segment Margin | 25.3 % | 25.9 % | -60 bps | |||
ENERGY AND SUSTAINABILITY SOLUTIONS | ||||||
Sales | 2 % | |||||
Organic1 Growth | 3 % | |||||
Segment Profit | 12 % | |||||
Segment Margin | 25.2 % | 23.2 % | 200 bps |
1 | See additional information at the end of this release regarding non-GAAP financial measures. | |
2 | Segment margin and adjusted EPS are non-GAAP financial measures. Management cannot reliably predict or estimate, without unreasonable effort, the impact and timing on future operating results arising from items excluded from segment margin or adjusted EPS. We therefore, do not present a guidance range, or a reconciliation to, the nearest GAAP financial measures of operating margin or EPS. | |
3 | Adjusted EPS and adjusted EPS V% guidance excludes items identified in the non-GAAP reconciliation of adjusted EPS at the end of this release, and any potential future one-time items that we cannot reliably predict or estimate such as pension mark-to-market. |
Honeywell is an integrated operating company serving a broad range of industries and geographies around the world. Our business is aligned with three powerful megatrends - automation, the future of aviation, and energy transition - underpinned by our Honeywell Accelerator operating system and Honeywell Connected Enterprise integrated software platform. As a trusted partner, we help organizations solve the world's toughest, most complex challenges, providing actionable solutions and innovations that help make the world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.
Honeywell uses our Investor Relations website, www.honeywell.com/investor, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media.
We describe many of the trends and other factors that drive our business and future results in this release. Such discussions contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are those that address activities, events, or developments that management intends, expects, projects, believes or anticipates will or may occur in the future. They are based on management's assumptions and assessments in light of past experience and trends, current economic and industry conditions, expected future developments and other relevant factors, many of which are difficult to predict and outside of our control. They are not guarantees of future performance, and actual results, developments and business decisions may differ significantly from those envisaged by our forward-looking statements. We do not undertake to update or revise any of our forward-looking statements, except as required by applicable securities law. Our forward-looking statements are also subject to material risks and uncertainties, including ongoing macroeconomic and geopolitical risks, such as lower GDP growth or recession, capital markets volatility, inflation, and certain regional conflicts, that can affect our performance in both the near- and long-term. In addition, no assurance can be given that any plan, initiative, projection, goal, commitment, expectation, or prospect set forth in this release can or will be achieved. These forward-looking statements should be considered in light of the information included in this release, our Form 10-K and other filings with the Securities and Exchange Commission. Any forward-looking plans described herein are not final and may be modified or abandoned at any time.
This release contains financial measures presented on a non-GAAP basis. Honeywell's non-GAAP financial measures used in this release are as follows:
- Segment profit, on an overall Honeywell basis;
- Segment profit margin, on an overall Honeywell basis;
- Organic sales growth;
- Free cash flow; and
- Adjusted earnings per share.
Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in the analysis of ongoing operating trends. These measures should be considered in addition to, and not as replacements for, the most comparable GAAP measure. Certain measures presented on a non-GAAP basis represent the impact of adjusting items net of tax. The tax-effect for adjusting items is determined individually and on a case-by-case basis. Refer to the Appendix attached to this release for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.
Honeywell International Inc. | |||||||
Consolidated Statement of Operations (Unaudited) | |||||||
(Dollars in millions, except per share amounts) | |||||||
Three Months Ended | Six Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Product sales | $ 6,477 | $ 6,441 | $ 12,740 | $ 12,751 | |||
Service sales | 3,100 | 2,705 | 5,942 | 5,259 | |||
Net sales | 9,577 | 9,146 | 18,682 | 18,010 | |||
Costs, expenses and other | |||||||
Cost of products sold1 | 4,247 | 4,133 | 8,282 | 8,201 | |||
Cost of services sold1 | 1,609 | 1,493 | 3,157 | 2,923 | |||
Total Cost of products and services sold | 5,856 | 5,626 | 11,439 | 11,124 | |||
Research and development expenses | 382 | 375 | 742 | 732 | |||
Selling, general and administrative expenses1 | 1,361 | 1,262 | 2,663 | 2,579 | |||
Other (income) expense | (246) | (208) | (477) | (468) | |||
Interest and other financial charges | 250 | 187 | 470 | 357 | |||
Total costs, expenses and other | 7,603 | 7,242 | 14,837 | 14,324 | |||
Income before taxes | 1,974 | 1,904 | 3,845 | 3,686 | |||
Tax expense | 414 | 403 | 810 | 777 | |||
Net income | 1,560 | 1,501 | 3,035 | 2,909 | |||
Less: Net income attributable to the noncontrolling interest | 16 | 14 | 28 | 28 | |||
Net income attributable to Honeywell | $ 1,544 | $ 1,487 | $ 3,007 | $ 2,881 | |||
Earnings per share of common stock - basic | $ 2.37 | $ 2.24 | $ 4.62 | $ 4.32 | |||
Earnings per share of common stock - assuming dilution | $ 2.36 | $ 2.22 | $ 4.59 | $ 4.29 | |||
Weighted average number of shares outstanding - basic | 650.2 | 665.3 | 651.3 | 666.5 | |||
Weighted average number of shares outstanding - assuming dilution | 654.2 | 670.2 | 655.5 | 671.9 |
1 | Cost of products and services sold and Selling, general and administrative expenses include amounts for repositioning and other charges, the service cost component of pension and other postretirement (income) expense, and stock compensation expense. |
Honeywell International Inc. | |||||||
Segment Data (Unaudited) | |||||||
(Dollars in millions) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
Net Sales | 2024 | 2023 | 2024 | 2023 | |||
Aerospace Technologies | $ 3,891 | $ 3,341 | $ 7,560 | $ 6,452 | |||
Industrial Automation | 2,506 | 2,727 | 4,984 | 5,530 | |||
Building Automation | 1,571 | 1,510 | 2,997 | 2,997 | |||
Energy and Sustainability Solutions | 1,604 | 1,567 | 3,129 | 3,028 | |||
Corporate and All Other | 5 | 1 | 12 | 3 | |||
Total | $ 9,577 | $ 9,146 | $ 18,682 | $ 18,010 | |||
Reconciliation of Segment Profit to Income Before Taxes | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
Segment Profit | 2024 | 2023 | 2024 | 2023 | |||
Aerospace Technologies | $ 1,060 | $ 930 | $ 2,095 | $ 1,761 | |||
Industrial Automation | 477 | 544 | 951 | 1,130 | |||
Building Automation | 397 | 391 | 747 | 772 | |||
Energy and Sustainability Solutions | 405 | 363 | 708 | 665 | |||
Corporate and All Other | (140) | (115) | (208) | (200) | |||
Total segment profit | 2,199 | 2,113 | 4,293 | 4,128 | |||
Interest and other financial charges | (250) | (187) | (470) | (357) | |||
Interest income | 110 | 76 | 215 | 152 | |||
Amortization of acquisition-related intangibles | (85) | (61) | (155) | (129) | |||
Stock compensation expense1 | (55) | (50) | (108) | (109) | |||
Pension ongoing income2 | 140 | 130 | 285 | 260 | |||
Other postretirement income2 | 4 | 7 | 10 | 13 | |||
Repositioning and other charges3,4 | (44) | (102) | (137) | (243) | |||
Other5 | (45) | (22) | (88) | (29) | |||
Income before taxes | $ 1,974 | $ 1,904 | $ 3,845 | $ 3,686 |
1 | Amounts included in Selling, general and administrative expenses. | |
2 | Amounts included in Cost of products and services sold (service cost component), Selling, general and administrative expenses (service cost component), Research and development expenses (service cost component), and Other (income) expense (non-service cost component). | |
3 | Amounts included in Cost of products and services sold, Selling, general and administrative expenses, and Other (income) expense. | |
4 | Includes repositioning, asbestos, and environmental expenses. | |
5 | Amounts include the other components of Other (income) expense not included within other categories in this reconciliation. Equity income of affiliated companies is included in segment profit. |
Honeywell International Inc. | |||
Consolidated Balance Sheet (Unaudited) | |||
(Dollars in millions) | |||
June 30, 2024 | December 31, 2023 | ||
ASSETS | |||
Current assets | |||
Cash and cash equivalents | $ 9,576 | $ 7,925 | |
Short-term investments | 231 | 170 | |
Accounts receivable, less allowances of | 7,759 | 7,530 | |
Inventories | 6,324 | 6,178 | |
Other current assets | 1,479 | 1,699 | |
Total current assets | 25,369 | 23,502 | |
Investments and long-term receivables | 1,472 | 939 | |
Property, plant and equipment—net | 5,752 | 5,660 | |
Goodwill | 20,824 | 18,049 | |
Other intangible assets—net | 5,208 | 3,231 | |
Insurance recoveries for asbestos-related liabilities | 163 | 170 | |
Deferred income taxes | 374 | 392 | |
Other assets | 10,167 | 9,582 | |
Total assets | $ 69,329 | $ 61,525 | |
LIABILITIES | |||
Current liabilities | |||
Accounts payable | $ 6,470 | $ 6,849 | |
Commercial paper and other short-term borrowings | 4,548 | 2,085 | |
Current maturities of long-term debt | 2,519 | 1,796 | |
Accrued liabilities | 7,507 | 7,809 | |
Total current liabilities | 21,044 | 18,539 | |
Long-term debt | 20,865 | 16,562 | |
Deferred income taxes | 2,137 | 2,094 | |
Postretirement benefit obligations other than pensions | 126 | 134 | |
Asbestos-related liabilities | 1,444 | 1,490 | |
Other liabilities | 6,196 | 6,265 | |
Redeemable noncontrolling interest | 7 | 7 | |
Shareowners' equity | 17,510 | 16,434 | |
Total liabilities, redeemable noncontrolling interest and shareowners' equity | $ 69,329 | $ 61,525 |
Honeywell International Inc. | |||||||
Consolidated Statement of Cash Flows (Unaudited) | |||||||
(Dollars in millions) | |||||||
Three Months Ended | Six Months Ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Cash flows from operating activities | |||||||
Net income | $ 1,560 | $ 1,501 | $ 3,035 | $ 2,909 | |||
Less: Net income attributable to noncontrolling interest | 16 | 14 | 28 | 28 | |||
Net income attributable to Honeywell | 1,544 | 1,487 | 3,007 | 2,881 | |||
Adjustments to reconcile net income attributable to Honeywell to net cash provided by | |||||||
Depreciation | 163 | 166 | 329 | 327 | |||
Amortization | 146 | 118 | 271 | 240 | |||
Repositioning and other charges | 44 | 102 | 137 | 243 | |||
Net payments for repositioning and other charges | (87) | (154) | (211) | (195) | |||
NARCO Buyout payment | — | — | — | (1,325) | |||
Pension and other postretirement income | (144) | (137) | (295) | (273) | |||
Pension and other postretirement benefit payments | (7) | (8) | (15) | (23) | |||
Stock compensation expense | 55 | 50 | 108 | 109 | |||
Deferred income taxes | (39) | (29) | (36) | 196 | |||
Other | (420) | (293) | (583) | (643) | |||
Changes in assets and liabilities, net of the effects of acquisitions and divestitures | |||||||
Accounts receivable | (202) | (83) | (149) | (505) | |||
Inventories | 63 | (100) | (77) | (338) | |||
Other current assets | 163 | 98 | 227 | 208 | |||
Accounts payable | (42) | — | (423) | 114 | |||
Accrued liabilities | 134 | 143 | (471) | (440) | |||
Net cash provided by operating activities | 1,371 | 1,360 | 1,819 | 576 | |||
Cash flows from investing activities | |||||||
Capital expenditures | (259) | (233) | (492) | (426) | |||
Proceeds from disposals of property, plant and equipment | — | 2 | — | 13 | |||
Increase in investments | (230) | (3) | (468) | (229) | |||
Decrease in investments | 237 | 246 | 392 | 632 | |||
Receipts (payments) from settlements of derivative contracts | 33 | (31) | 76 | (38) | |||
Cash paid for acquisitions, net of cash acquired | (4,913) | (661) | (4,913) | (661) | |||
Net cash used for investing activities | (5,132) | (680) | (5,405) | (709) | |||
Cash flows from financing activities | |||||||
Proceeds from issuance of commercial paper and other short-term borrowings | 4,770 | 3,895 | 6,993 | 8,000 | |||
Payments of commercial paper and other short-term borrowings | (2,019) | (4,636) | (4,489) | (7,930) | |||
Proceeds from issuance of common stock | 165 | 78 | 309 | 115 | |||
Proceeds from issuance of long-term debt | — | 2,966 | 5,710 | 2,966 | |||
Payments of long-term debt | (32) | (21) | (605) | (1,384) | |||
Repurchases of common stock | (529) | (477) | (1,200) | (1,176) | |||
Cash dividends paid | (743) | (691) | (1,446) | (1,416) | |||
Other | (10) | (4) | 26 | (38) | |||
Net cash provided by (used for) financing activities | 1,602 | 1,110 | 5,298 | (863) | |||
Effect of foreign exchange rate changes on cash and cash equivalents | (21) | (33) | (61) | (5) | |||
Net increase (decrease) in cash and cash equivalents | (2,180) | 1,757 | 1,651 | (1,001) | |||
Cash and cash equivalents at beginning of period | 11,756 | 6,869 | 7,925 | 9,627 | |||
Cash and cash equivalents at end of period | $ 9,576 | $ 8,626 | $ 9,576 | $ 8,626 |
Appendix
Non-GAAP Financial Measures
The following information provides definitions and reconciliations of certain non-GAAP financial measures presented in this press release to which this reconciliation is attached to the most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (GAAP).
Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in the analysis of ongoing operating trends. These measures should be considered in addition to, and not as replacements for, the most comparable GAAP measure. Certain measures presented on a non-GAAP basis represent the impact of adjusting items net of tax. The tax-effect for adjusting items is determined individually and on a case-by-case basis. Other companies may calculate these non-GAAP measures differently, limiting the usefulness of these measures for comparative purposes.
Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitations of these non-GAAP financial measures are that they exclude significant expenses and income that are required by GAAP to be recognized in the consolidated financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Investors are urged to review the reconciliation of the non-GAAP financial measures to the comparable GAAP financial measures and not to rely on any single financial measure to evaluate Honeywell's business.
Honeywell International Inc. | |
Reconciliation of Organic Sales % Change | |
(Unaudited) | |
Three Months Ended | |
Honeywell | |
Reported sales % change | 5 % |
Less: Foreign currency translation | — % |
Less: Acquisitions, divestitures and other, net | 1 % |
Organic sales % change | 4 % |
Aerospace Technologies | |
Reported sales % change | 16 % |
Less: Foreign currency translation | — % |
Less: Acquisitions, divestitures and other, net | — % |
Organic sales % change | 16 % |
Industrial Automation | |
Reported sales % change | (8) % |
Less: Foreign currency translation | (1) % |
Less: Acquisitions, divestitures and other, net | 1 % |
Organic sales % change | (8) % |
Building Automation | |
Reported sales % change | 4 % |
Less: Foreign currency translation | (1) % |
Less: Acquisitions, divestitures and other, net | 4 % |
Organic sales % change | 1 % |
Energy and Sustainability Solutions | |
Reported sales % change | 2 % |
Less: Foreign currency translation | (1) % |
Less: Acquisitions, divestitures and other, net | — % |
Organic sales % change | 3 % |
We define organic sales percentage as the year-over-year change in reported sales relative to the comparable period, excluding the impact on sales from foreign currency translation and acquisitions, net of divestitures, for the first 12 months following the transaction date. We believe this measure is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.
A quantitative reconciliation of reported sales percent change to organic sales percent change has not been provided for forward-looking measures of organic sales percent change because management cannot reliably predict or estimate, without unreasonable effort, the fluctuations in global currency markets that impact foreign currency translation, nor is it reasonable for management to predict the timing, occurrence and impact of acquisition and divestiture transactions, all of which could significantly impact our reported sales percent change.
Honeywell International Inc. | |||||
Reconciliation of Operating Income to Segment Profit, Calculation of Operating Income and Segment Profit Margins | |||||
(Unaudited) | |||||
(Dollars in millions) | |||||
Three Months Ended June 30, | Twelve Months | ||||
2024 | 2023 | 2023 | |||
Operating income | $ 1,978 | $ 1,883 | $ 7,084 | ||
Stock compensation expense1 | 55 | 50 | 202 | ||
Repositioning, Other2,3 | 58 | 103 | 952 | ||
Pension and other postretirement service costs3 | 16 | 16 | 66 | ||
Amortization of acquisition-related intangibles | 85 | 61 | 292 | ||
Acquisition-related costs4 | 7 | — | 2 | ||
Segment profit | $ 2,199 | $ 2,113 | $ 8,598 | ||
Operating income | $ 1,978 | $ 1,883 | $ 7,084 | ||
÷ Net sales | $ 9,577 | $ 9,146 | $ 36,662 | ||
Operating income margin % | 20.7 % | 20.6 % | 19.3 % | ||
Segment profit | $ 2,199 | $ 2,113 | $ 8,598 | ||
÷ Net sales | $ 9,577 | $ 9,146 | $ 36,662 | ||
Segment profit margin % | 23.0 % | 23.1 % | 23.5 % |
1 | Included in Selling, general and administrative expenses. | |
2 | Includes repositioning, asbestos, environmental expenses, equity income adjustment, and other charges. For the three months ended June 30, 2023, other charges include | |
3 | Included in Cost of products and services sold and Selling, general and administrative expenses. | |
4 | Includes acquisition-related fair value adjustments to inventory. |
We define operating income as net sales less total cost of products and services sold, research and development expenses, and selling, general and administrative expenses. We define segment profit, on an overall Honeywell basis, as operating income, excluding stock compensation expense, pension and other postretirement service costs, amortization of acquisition-related intangibles, certain acquisition-related costs, and repositioning and other charges. We define segment profit margin, on an overall Honeywell basis, as segment profit divided by net sales. We believe these measures are useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends.
A quantitative reconciliation of operating income to segment profit, on an overall Honeywell basis, has not been provided for all forward-looking measures of segment profit and segment profit margin included herein. Management cannot reliably predict or estimate, without unreasonable effort, the impact and timing on future operating results arising from items excluded from segment profit, particularly pension mark-to-market expense as it is dependent on macroeconomic factors, such as interest rates and the return generated on invested pension plan assets. The information that is unavailable to provide a quantitative reconciliation could have a significant impact on our reported financial results. To the extent quantitative information becomes available without unreasonable effort in the future, and closer to the period to which the forward-looking measures pertain, a reconciliation of operating income to segment profit will be included within future filings.
Acquisition amortization and acquisition-related costs are significantly impacted by the timing, size, and number of acquisitions we complete and are not on a predictable cycle, and we make no comment as to when or whether any future acquisitions may occur. We believe excluding these costs provides investors with a more meaningful comparison of operating performance over time and with both acquisitive and other peer companies.
Honeywell International Inc. | |||||||
Reconciliation of Earnings per Share to Adjusted Earnings per Share | |||||||
(Unaudited) | |||||||
Three Months Ended June 30, | Twelve Months Ended December 31, | ||||||
2024 | 2023 | 2023 | 2024(E) | ||||
Earnings per share of common stock - diluted1 | $ 2.36 | $ 2.22 | $ 8.47 | ||||
Pension mark-to-market expense2 | — | — | 0.19 | No Forecast | |||
Amortization of acquisition-related intangibles3 | 0.10 | 0.07 | 0.35 | 0.48 | |||
Acquisition-related costs4 | 0.03 | — | 0.01 | 0.07 | |||
Russian-related charges5 | — | — | — | 0.02 | |||
Net expense related to the NARCO Buyout and HWI Sale6 | — | 0.01 | 0.01 | — | |||
Adjustment to estimated future Bendix liability7 | — | — | 0.49 | — | |||
Adjusted earnings per share of common stock - diluted | $ 2.49 | $ 2.30 | $ 9.52 |
1 | For the three months ended June 30, 2024, and 2023, adjusted earnings per share utilizes weighted average shares of approximately 654.2 million and 670.2 million, respectively. For the twelve months ended December 31, 2023, adjusted earnings per share utilizes weighted average shares of approximately 668.2 million. For the twelve months ended December 31, 2024, expected earnings per share utilizes weighted average shares of approximately 655 million. | |
2 | Pension mark-to-market expense uses a blended tax rate of | |
3 | For the three months ended June 30, 2024, acquisition-related intangibles amortization includes approximately | |
4 | For the three months ended June 30, 2024, the adjustment for acquisition-related costs, which is principally comprised of third-party transaction and integration costs and acquisition-related fair value adjustments to inventory, is approximately | |
5 | For the three months ended June 30, 2023, the adjustment was | |
6 | For the three months ended June 30, 2023 and the twelve months ended December 31, 2023, the adjustment was | |
7 | Bendix Friction Materials ("Bendix") is a business no longer owned by the Company. In 2023, the Company changed its valuation methodology for calculating legacy Bendix liabilities. For the twelve months ended December 31, 2023, the adjustment was |
We define adjusted earnings per share as diluted earnings per share adjusted to exclude various charges as listed above. We believe adjusted earnings per share is a measure that is useful to investors and management in understanding our ongoing operations and in analysis of ongoing operating trends. For forward-looking information, management cannot reliably predict or estimate, without unreasonable effort, the pension mark-to-market expense as it is dependent on macroeconomic factors, such as interest rates and the return generated on invested pension plan assets. We therefore do not include an estimate for the pension mark-to-market expense. Based on economic and industry conditions, future developments, and other relevant factors, these assumptions are subject to change.
Acquisition amortization and acquisition-related costs are significantly impacted by the timing, size, and number of acquisitions we complete and are not on a predictable cycle and we make no comment as to when or whether any future acquisitions may occur. We believe excluding these costs provides investors with a more meaningful comparison of operating performance over time and with both acquisitive and other peer companies.
Honeywell International Inc. | |||
Reconciliation of Cash Provided by Operating Activities to Free Cash Flow | |||
(Unaudited) | |||
(Dollars in millions) | |||
Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | ||
Cash provided by operating activities | $ 1,371 | $ 1,360 | |
Capital expenditures | (259) | (233) | |
Free cash flow | $ 1,112 | $ 1,127 |
We define free cash flow as cash provided by operating activities less cash for capital expenditures.
We believe that free cash flow is a non-GAAP measure that is useful to investors and management as a measure of cash generated by operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, pay dividends, repurchase stock, or repay debt obligations prior to their maturities. This measure can also be used to evaluate our ability to generate cash flow from operations and the impact that this cash flow has on our liquidity.
Honeywell International Inc. | |
Reconciliation of Expected Cash Provided by Operating Activities to Expected Free Cash Flow | |
(Unaudited) | |
Twelve Months Ended | |
Cash provided by operating activities | |
Capital expenditures | ~(1.1) |
Free cash flow |
We define free cash flow as cash provided by operating activities less cash for capital expenditures.
We believe that free cash flow is a non-GAAP measure that is useful to investors and management as a measure of cash generated by operations that will be used to repay scheduled debt maturities and can be used to invest in future growth through new business development activities or acquisitions, pay dividends, repurchase stock, or repay debt obligations prior to their maturities. This measure can also be used to evaluate our ability to generate cash flow from operations and the impact that this cash flow has on our liquidity.
Contacts: | |
Media | Investor Relations |
Stacey Jones | Sean Meakim |
(980) 378-6258 | (704) 627-6200 |
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SOURCE Honeywell
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