Honeywell International Inc.’s ( HON Quick Quote HON - Free Report) second-quarter 2022 adjusted earnings (excluding 26 cents from non-recurring items) of $2.10 per share surpassed the Zacks Consensus Estimate of $2.03. The bottom line improved approximately 4% year over year. Total revenues of $8,953 million also outperformed the Zacks Consensus Estimate of $8,687.1 million. The top line increased roughly 2% from the year-ago quarter. Organic sales increased 4% due to growth in commercial aerospace, building products, advanced sensing technologies and advanced materials businesses. Segmental Details
Aerospace’s quarterly revenues were $2,898 million, up 4.4% year over year. Honeywell Building Technologies’ revenues increased 9% to $1,531 million. Performance Materials and Technologies’ revenues totaled $2,694 million, up 6%, while that for Safety and Productivity Solutions decreased 12% to $1,829 million.
The company’s total cost of sales in the reported quarter was $6,046 million, up 0.7% year over year. Selling, general and administrative expenses were $1,306 million, up 8.2%. Interest expenses and other financial charges were $87 million compared with $83 million a year ago.
Operating income in the second quarter was $1,601 million, nearly flat on a year-over-year basis. The operating income margin was 17.9%, compared with 18.1% in the year-ago period. The downside was due to additional charges related to wind down of operations in Russia. Balance Sheet/Cash Flow
Exiting the second quarter, Honeywell had cash and cash equivalents of $8,248 million compared with $10,959 million at the end of December 2021. Long-term debt was $12,491 million, lower than $14,254 million recorded at the end of 2021.
In the first half of 2022, HON generated $825 million in cash from operating activities compared with $2,256 million at the end of the year-ago period. Capital expenditures totaled $341 million in the first half of 2022 compared with $406 million incurred in the year-ago period. Free cash flow in the quarter was $843 million, down 43% year over year. Improved 2022 Guidance
Honeywell expects total sales of $35.50-$36.10 billion for the current year, compared with the previous expectation of $35.50-$36.40 billion. The Zacks Consensus Estimate for the same stands at $35.71 billion. Adjusted earnings per share is expected to increase 6-9% year over year (previous view: 5-9%) to $8.55-$8.80 ($8.50 - $8.80 expected earlier) in the current year. The mid-point — $8.66 — of the guided range lies above the Zacks Consensus Estimate of $8.64.
Honeywell anticipates organic growth of 5-7% for the current year, compared with 4-7% estimated earlier. Organic growth (excluding impact of COVID-driven mask sales declines and lost Russian sales) is expected to be 7-9% compared with 6-9% predicted earlier. HON forecasts operating cash flow of $5.50-$5.90 billion compared with $5.70-$6.10 billion anticipated earlier. Free cash flow is expected to be $4.70-$5.10 billion compared with $4.70-$5.10 billion estimated earlier. Zacks Rank & Key Picks
Honeywell carries a Zacks Rank #3 (Hold).
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