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Honeywell (HON) Beats on Q3 Earnings & Revenues, Revises View
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Honeywell International Inc.’s (HON - Free Report) third-quarter 2023 earnings of $2.27 per share surpassed the Zacks Consensus Estimate of $2.22. The bottom line was nearly flat on a reported basis. On an adjusted basis, earnings inched up around 1%.
Total revenues of $9,212 million outperformed the Zacks Consensus Estimate of $9,207.9 million. The top line inched up around 3% from the year-ago quarter. Organic sales increased 2% due to growth in commercial aviation, defense and space, and process solutions.
Segmental Details
Aerospace’s quarterly revenues were $3,499 million, up 18% year over year. Growth in commercial aviation and defense and space markets drove revenues. Our estimate for Aerospace revenues in the third quarter was $3,376.5 million.
Honeywell International Inc. Price, Consensus and EPS Surprise
Honeywell Building Technologies’ revenues remained flat at $1,530 million due to growth in building solutions as a result of the strong execution of building projects. Our estimate for segmental revenues was pegged at $1,572.1 million.
Performance Materials and Technologies’ revenues totaled $2,867 million, up 5% year over year. Our estimate for Performance Materials and Technologies revenues in the third quarter was $2,849 million. Segmental revenues were driven by strong organic growth in the UOP business, strength in projects and lifecycle solutions and services, and strong orders in sustainable technology solutions business.
Safety and Productivity Solutions revenues decreased 24% to $1,314 million due to lower volumes in warehouse and workflow solutions as a result of softness in the warehouse automation market. Our estimate for the segment’s revenues was $1,390 million.
Costs/Margins
The company’s total cost of sales (cost of products and services) in the reported quarter was $5,670 million, up 1.4% year over year. Selling, general and administrative expenses were $1,252 million, up 2%. Interest expenses and other financial charges were $206 million compared with $98 million a year ago.
Operating income in the third quarter was $1,926 million, up 10.6% year over year. The operating income margin was 20.9% compared with 19.5% in the year-ago period.
Balance Sheet/Cash Flow
Honeywell, carrying a Zacks Rank #3 (Hold), had cash and cash equivalents of $7,770 million compared with $9,627 million at the end of December 2022. Long-term debt was $16,683 million, higher than $15,123 million at 2022-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
In the first nine months of 2023, Honeywell generated net cash of $2,385 million from operating activities compared with $2,908 million in the year-ago period. Capital expenditure totaled $675 million in the first nine months of 2023 compared with $525 million in the year-ago period.
Free cash flow was $1,560 million in the third quarter compared with $1,899 million in the year-ago period.
2023 Guidance Revised
For 2023, Honeywell expects sales of $36.8-$37.1 billion compared with $36.7-$37.3 billion anticipated earlier. The mid-point of the guided range — $36.95 billion — lies above the Zacks Consensus Estimate of $36.81 billion. Organic sales are expected to increase 4-5% compared with a rise of 4-6% estimated earlier.
HON expects segment margin of 22.5-22.6% compared with 22.4-22.6% predicted earlier. Adjusted earnings per share are expected to be between $9.10 and $9.20 compared with $9.05 and $9.25 anticipated earlier. The mid-point of the guided range — $9.15 — is in line with the Zacks Consensus Estimate.
Honeywell continues to expect operating cash flow of $4.9-$5.3 billion for 2023. Free cash flow is still expected to be $3.9-$4.3 billion.
Performance of Some Other Conglomerates
General Electric Company (GE - Free Report) reported third-quarter 2023 adjusted earnings of 82 cents per share, which beat the Zacks Consensus Estimate of 56 cents. The bottom line jumped more than 100% year over year.
General Electric’s total revenues of $17,346 million beat the consensus estimate of $15,675 million. The top line increased 19.9% year over year.
3M Company (MMM - Free Report) reported third-quarter 2023 adjusted earnings of $2.68 per share, which surpassed the Zacks Consensus Estimate of $2.34.
3M’s net sales of $8,312 million outperformed the Zacks Consensus Estimate of $7,952.7 million. However, the top line declined 3.6% year over year due to a 3.7% decrease in organic sales.
Danaher Corporation’s (DHR - Free Report) third-quarter 2023 adjusted earnings of $2.02 per share surpassed the Zacks Consensus Estimate of $1.83. However, the bottom line declined 21.1% year over year.
Danaher’s net sales of $6,873 million outperformed the consensus estimate of $6,611.7 million. However, it declined 10.3% year over year due to a decrease in the sale of COVID-related products and weak demand in the Life Sciences segment.
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Honeywell (HON) Beats on Q3 Earnings & Revenues, Revises View
Honeywell International Inc.’s (HON - Free Report) third-quarter 2023 earnings of $2.27 per share surpassed the Zacks Consensus Estimate of $2.22. The bottom line was nearly flat on a reported basis. On an adjusted basis, earnings inched up around 1%.
Total revenues of $9,212 million outperformed the Zacks Consensus Estimate of $9,207.9 million. The top line inched up around 3% from the year-ago quarter. Organic sales increased 2% due to growth in commercial aviation, defense and space, and process solutions.
Segmental Details
Aerospace’s quarterly revenues were $3,499 million, up 18% year over year. Growth in commercial aviation and defense and space markets drove revenues. Our estimate for Aerospace revenues in the third quarter was $3,376.5 million.
Honeywell International Inc. Price, Consensus and EPS Surprise
Honeywell International Inc. price-consensus-eps-surprise-chart | Honeywell International Inc. Quote
Honeywell Building Technologies’ revenues remained flat at $1,530 million due to growth in building solutions as a result of the strong execution of building projects. Our estimate for segmental revenues was pegged at $1,572.1 million.
Performance Materials and Technologies’ revenues totaled $2,867 million, up 5% year over year. Our estimate for Performance Materials and Technologies revenues in the third quarter was $2,849 million. Segmental revenues were driven by strong organic growth in the UOP business, strength in projects and lifecycle solutions and services, and strong orders in sustainable technology solutions business.
Safety and Productivity Solutions revenues decreased 24% to $1,314 million due to lower volumes in warehouse and workflow solutions as a result of softness in the warehouse automation market. Our estimate for the segment’s revenues was $1,390 million.
Costs/Margins
The company’s total cost of sales (cost of products and services) in the reported quarter was $5,670 million, up 1.4% year over year. Selling, general and administrative expenses were $1,252 million, up 2%. Interest expenses and other financial charges were $206 million compared with $98 million a year ago.
Operating income in the third quarter was $1,926 million, up 10.6% year over year. The operating income margin was 20.9% compared with 19.5% in the year-ago period.
Balance Sheet/Cash Flow
Honeywell, carrying a Zacks Rank #3 (Hold), had cash and cash equivalents of $7,770 million compared with $9,627 million at the end of December 2022. Long-term debt was $16,683 million, higher than $15,123 million at 2022-end. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
In the first nine months of 2023, Honeywell generated net cash of $2,385 million from operating activities compared with $2,908 million in the year-ago period. Capital expenditure totaled $675 million in the first nine months of 2023 compared with $525 million in the year-ago period.
Free cash flow was $1,560 million in the third quarter compared with $1,899 million in the year-ago period.
2023 Guidance Revised
For 2023, Honeywell expects sales of $36.8-$37.1 billion compared with $36.7-$37.3 billion anticipated earlier. The mid-point of the guided range — $36.95 billion — lies above the Zacks Consensus Estimate of $36.81 billion. Organic sales are expected to increase 4-5% compared with a rise of 4-6% estimated earlier.
HON expects segment margin of 22.5-22.6% compared with 22.4-22.6% predicted earlier. Adjusted earnings per share are expected to be between $9.10 and $9.20 compared with $9.05 and $9.25 anticipated earlier. The mid-point of the guided range — $9.15 — is in line with the Zacks Consensus Estimate.
Honeywell continues to expect operating cash flow of $4.9-$5.3 billion for 2023. Free cash flow is still expected to be $3.9-$4.3 billion.
Performance of Some Other Conglomerates
General Electric Company (GE - Free Report) reported third-quarter 2023 adjusted earnings of 82 cents per share, which beat the Zacks Consensus Estimate of 56 cents. The bottom line jumped more than 100% year over year.
General Electric’s total revenues of $17,346 million beat the consensus estimate of $15,675 million. The top line increased 19.9% year over year.
3M Company (MMM - Free Report) reported third-quarter 2023 adjusted earnings of $2.68 per share, which surpassed the Zacks Consensus Estimate of $2.34.
3M’s net sales of $8,312 million outperformed the Zacks Consensus Estimate of $7,952.7 million. However, the top line declined 3.6% year over year due to a 3.7% decrease in organic sales.
Danaher Corporation’s (DHR - Free Report) third-quarter 2023 adjusted earnings of $2.02 per share surpassed the Zacks Consensus Estimate of $1.83. However, the bottom line declined 21.1% year over year.
Danaher’s net sales of $6,873 million outperformed the consensus estimate of $6,611.7 million. However, it declined 10.3% year over year due to a decrease in the sale of COVID-related products and weak demand in the Life Sciences segment.