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Honeywell International Inc. (HON - Free Report) has reported better-than-expected first-quarter 2021 results, wherein both earnings and revenues surpassed estimates.
Earnings & Revenues
Adjusted earnings were $1.92 per share, surpassing the Zacks Consensus Estimate of $1.80. However, the bottom line was down 13.1% year over year.
Honeywell’s first-quarter revenues were $8,454 million, surpassing the consensus estimate of $8,130 million. The top line dipped 0.1% year over year on a reported basis and 2% on an organic basis, owing to persistent weakness across commercial aftermarket and commercial original equipment businesses and lower demand for licensing and catalysts in UOP business.
Segmental Breakup
Coming to operating segments, Aerospace’s quarterly revenues were $2,632 million, down 22% year over year. Honeywell Building Technologies’ revenues increased 6% to $1,358 million. Performance Materials and Technologies’ revenues totaled $2,346 million, down 2%, while that for Safety and Productivity Solutions increased 49% to $2,118 million.
Costs/Margins
The company’s total cost of sales in the reported quarter was $5,709 million, up 3.2% year over year. Selling, general and administrative expenses were relatively flat at $1,236 million. Interest expenses and other financial charges were $90 million compared with $73 million a year ago.
Operating income margin in the first quarter was 17.8%, down 220 basis points year over year.
Balance Sheet/Cash Flow
Exiting the first quarter of 2021, Honeywell had cash and cash equivalents of $11,718 million compared with $14,275 million as of Dec 31, 2020. Long-term debt was $16,124 million, lower than $16,342 million recorded at the end of 2020.
In the first three months of 2021, the company generated $978 million in cash from operating activities compared with $939 million a year ago. Capital expenditure was $221 million compared with $139 million incurred in the year-ago-quarter.
Adjusted free cash flow in the quarter was $757 million, down 5.4% year over year.
Outlook
Honeywell updated guidance for full-year 2021. For the year, the company anticipates earnings to be in the range of $7.75 to $8.00 per share, higher than $7.60 to $8.00 guided earlier. It anticipates revenues to be between $34 billion and $34.8 billion, with organic revenues expected to be up 3-5%. Notably, it previously anticipated revenues to lie in the range of $33.4 billion and $34.4 billion.
For 2021, it also expects operating cash flow in the range of $5.8 billion to $6.1 billion, and free cash flow to be between $5.2 billion and $5.5 billion.
Honeywell International Inc. Price, Consensus and EPS Surprise
Astec Industries delivered a positive earnings surprise of 172.72%, on average, in the trailing four quarters.
Dover delivered a positive earnings surprise of 21.35%, on average, in the trailing four quarters.
Applied Industrial delivered a positive earnings surprise of 21.92%, on average, in the trailing four quarters.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Honeywell's (HON) Q1 Earnings & Revenues Surpass Estimates
Honeywell International Inc. (HON - Free Report) has reported better-than-expected first-quarter 2021 results, wherein both earnings and revenues surpassed estimates.
Earnings & Revenues
Adjusted earnings were $1.92 per share, surpassing the Zacks Consensus Estimate of $1.80. However, the bottom line was down 13.1% year over year.
Honeywell’s first-quarter revenues were $8,454 million, surpassing the consensus estimate of $8,130 million. The top line dipped 0.1% year over year on a reported basis and 2% on an organic basis, owing to persistent weakness across commercial aftermarket and commercial original equipment businesses and lower demand for licensing and catalysts in UOP business.
Segmental Breakup
Coming to operating segments, Aerospace’s quarterly revenues were $2,632 million, down 22% year over year. Honeywell Building Technologies’ revenues increased 6% to $1,358 million. Performance Materials and Technologies’ revenues totaled $2,346 million, down 2%, while that for Safety and Productivity Solutions increased 49% to $2,118 million.
Costs/Margins
The company’s total cost of sales in the reported quarter was $5,709 million, up 3.2% year over year. Selling, general and administrative expenses were relatively flat at $1,236 million. Interest expenses and other financial charges were $90 million compared with $73 million a year ago.
Operating income margin in the first quarter was 17.8%, down 220 basis points year over year.
Balance Sheet/Cash Flow
Exiting the first quarter of 2021, Honeywell had cash and cash equivalents of $11,718 million compared with $14,275 million as of Dec 31, 2020. Long-term debt was $16,124 million, lower than $16,342 million recorded at the end of 2020.
In the first three months of 2021, the company generated $978 million in cash from operating activities compared with $939 million a year ago. Capital expenditure was $221 million compared with $139 million incurred in the year-ago-quarter.
Adjusted free cash flow in the quarter was $757 million, down 5.4% year over year.
Outlook
Honeywell updated guidance for full-year 2021. For the year, the company anticipates earnings to be in the range of $7.75 to $8.00 per share, higher than $7.60 to $8.00 guided earlier. It anticipates revenues to be between $34 billion and $34.8 billion, with organic revenues expected to be up 3-5%. Notably, it previously anticipated revenues to lie in the range of $33.4 billion and $34.4 billion.
For 2021, it also expects operating cash flow in the range of $5.8 billion to $6.1 billion, and free cash flow to be between $5.2 billion and $5.5 billion.
Honeywell International Inc. Price, Consensus and EPS Surprise
Honeywell International Inc. price-consensus-eps-surprise-chart | Honeywell International Inc. Quote
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks are Astec Industries, Inc. (ASTE - Free Report) , Dover Corporation (DOV - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) . While Astec Industries and Dover currently sport a Zacks Rank #1 (Strong Buy), Applied Industrial carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Astec Industries delivered a positive earnings surprise of 172.72%, on average, in the trailing four quarters.
Dover delivered a positive earnings surprise of 21.35%, on average, in the trailing four quarters.
Applied Industrial delivered a positive earnings surprise of 21.92%, on average, in the trailing four quarters.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>