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Honeywell Stock Gains On Q1 Beat, Raised FY22 Profit Guidance

Benzinga · 04/29/2022 09:02
  • Honeywell International Inc (NASDAQ:HON) reported a first-quarter sales decline of 1% year-over-year to $8.38 billion, +1% on an organic basis, beating the consensus of $8.29 billion.
  • Adjusted EPS declined by 1% Y/Y to $1.91, beating the consensus of $1.86.
  • Aerospace sales increased 4% Y/Y to $2.75 billion, and segment margin contracted by 160 bps to 27.4%.
  • Honeywell Building Technologies sales increased by 5% Y/Y to $1.43 billion, and segment margin expanded by 100 bps to 23.5%.
  • Performance Materials and Technologies sales increased by 5% Y/Y to $2.45 billion, and segment margin expanded by 230 bps to 20.8%.
  • Safety and Productivity Solutions sales decreased by 18% Y/Y to $1.74 billion, and segment margin improved by 20 bps to 14.5%.
  • Total segment margin expanded by 10 bps to 21.1%, and operating margin contracted 260 bps to 15.2%.
  • Honeywell generated $36 million in operating cash flow for Q1, compared to $978 million a year ago. Free cash flow was $50 million.
  • Honeywell stated that demand during the quarter remained strong, with orders up 13% Y/Y and long-cycle orders growth of over 20%; backlog was $28.5 billion, up 9% Y/Y, led by strength in Aero, HBT, and PMT.
  • The company deployed $2 billion in capital, including $1 billion to share repurchases as part of a $4 billion commitment in 2022.
  • “We see solid recovery in our key commercial aerospace and energy end markets, and our ongoing investments in areas like our sustainable technology solutions business will provide additional sources of growth,” commented Darius Adamczyk, chairman and CEO.
  • FY22 Outlook: Honeywell expects sales of $35.5 billion - $36.4 billion (prior $35.4 billion -$36.4 billion) vs. the consensus of $36 billion, representing 4% - 7% organic growth. It expects segment margin of 21.1% - 21.5%.
  • Honeywell sees adjusted EPS of $8.50 - $8.80 (prior $8.40 - $8.70) vs. the consensus of $8.60. It expects operating cash flow of $5.7 billion - $6.1 billion, with free cash flow of $4.7 billion – $5.1 billion.
  • Price Action: HON shares are trading higher by 2.27% at $194.24 during the premarket session on Friday.