Honeywell International Company (NASDAQ:HON) shares are trading lower after the company reported third-quarter results And updated FY24 guidance.
Revenue grew 6% year over year (organic: +3%) to $9.728 billion, missing the consensus of $9.901 billion.
The increase in sales was due to strong growth in the defence, aerospace, commercial aviation and construction solutions sectors.
Adjusted EPS was $2.58 (+8% YoY), Beating the consensus of $2.50.
Sales by sectors: Aviation technologies $3.912 billion (+12% y/y), industrial automation $2.50 billion (-5% y/y), building automation $1.75 billion (+14% y/y), energy and sustainability solutions $1.56 billion ( +1%) p/p).
Operating margin contracted 180 basis points year over year to 19.1%, and segment margin remained flat year over year at 23.6% in the quarter.
Operating cash flow was $2.00 billion and free cash flow was $1.72 billion. Honeywell had cash and cash equivalents of approximately $10.6 billion as of September 30, 2024.
The company allocated $3.1 billion for mergers and acquisitions, dividends and capital expenditures.
FY24 forecast: The company lowered sales guidance to $38.6 billion – $38.8 billion (from $39.1 billion – $39.7 billion previously) versus the consensus of $39.20 billion.
Honeywell tightened adjusted EPS guidance to $10.15-$10.25 (from $10.05-$10.25) Versus estimate of $10.13.
Honeywell also revised its segment margin forecast to 23.4% – 23.5% (from 23.3% – 23.5% previously), with segment margin contracting 10 basis points to flat.
The company now expects operating cash flow of $6.2 billion – $6.5 billion Free cash flow of $5.1 billion – $5.4 billion.
“Our Accelerator operating system and execution culture enabled us to grow segment profits by 6% despite temporary sales headwinds,” said Vimal Kapoor, Chairman and CEO of Honeywell. “We continue to see healthy order rates and sequential growth in our backlog, even with Excluding the impact of acquisitions that closed this quarter gives us confidence in our ability to achieve our long-term goals.
“We have made significant progress this year in simplifying and improving the Honeywell portfolio with the announcement of our plans to separate Advanced Materials and exit our PPE business, as well as… Closed four strategic acquisitions“.
Investors can gain exposure to a stock by… Topics Transatlantic Defense ETF ETF (NASDAQ:NATO) and Invesco Aviation, Space and Defense Fund (NYSE: PPA).
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