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Honeywell Gears Up to Report Q2 Earnings: Is a Beat in Store?
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Key Takeaways
HON's Q2 revenues are expected to rise 4.6% to $10B, with EPS up 6% to $2.64.
Aerospace and energy units likely drove growth, offset by industrial automation segment weakness.
Rising costs from digital and integration investments may pressure Honeywell's margins this quarter.
Honeywell International Inc. (HON - Free Report) is scheduled to release second-quarter 2025 results on July 24, before market open.
The Zacks Consensus Estimate for HON’s second-quarter revenues is pegged at $10 billion, indicating growth of 4.6% from the prior-year quarter’s figure. The consensus mark for earnings is pinned at $2.64 per share, which has edged up 1.1% in the past 60 days. The figure indicates a growth of 6% from the year-ago quarter's figure.
The company delivered better-than-expected results in each of the trailing four quarters, the earnings surprise being 6.6% on average. In the last reported quarter, its bottom line beat the consensus estimate by 13.6%.
Let us see how things have shaped up for Honeywell this earnings season.
Factors Likely to Have Shaped HON’s Quarterly Performance
Strong momentum in Honeywell’s commercial aviation aftermarket business, driven by robust demand in the air transport and business aviation markets, is expected to have supplemented the top-line performance of its Aerospace Technologies segment. Strength in the defense and space business, owing to stable U.S. and international defense spending volumes, is likely to have been a tailwind as well. We expect the segment’s revenues to increase 10.1% year over year to $4.28 billion in the second quarter.
Solid demand for its products and solutions, supported by a strong pipeline of building projects, particularly in North America and the Middle East, is expected to augment the Building Automation segment’s results. Increasing order rates across data centers, airports and healthcare markets are also anticipated to have boosted its performance. Our estimate for revenues from the Building Automation segment is pegged at $1.71 billion, indicating a decrease of 8.8% year over year.
The Energy and Sustainability Solutions segment is expected to have witnessed a year-over-year increase in revenues, driven by strength in the Universal Oil Products business, on account of higher refining and petrochemicals projects. We expect the segment’s revenues to increase 1.8% year over year to $1.63 billion in the second quarter.
However, Honeywell’s Industrial Automation Solutions segment is expected to have put up a weak show in the quarter due to persistent weakness in the sensing and safety technologies businesses. Softness in the process solutions business, due to lower demand for smart energy and thermal solutions, is also expected to have been a spoilsport. For the second quarter, our estimate for revenues from the Industrial Automation segment is pegged at $2.36 billion, indicating a year-over-year decline of 5.7%.
Over time, HON’s performance has been negatively impacted by high costs and expenses. The company’s investments in digital infrastructure and business integration activities are expected to have pushed up its operating expenses, which are likely to have reflected in its margins. We expect HON’s cost of sales to increase 5.1% year over year to $6.1 billion and the operating margin to decline 180 basis points to 18.8% in the second quarter.
Honeywell International Inc. Price and EPS Surprise
Our proven model predicts an earnings beat for HON this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: HON has an Earnings ESP of + 0.58% as the Most Accurate Estimate is pegged at $2.66 per share, which is higher than the Zacks Consensus Estimate of $2.64. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: HON currently carries a Zacks Rank of 3.
Other Stocks to Consider
Here are some other companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
CSL is slated to release second-quarter 2025 results on July 30. Carlisle’s earnings surpassed the Zacks Consensus Estimate thrice and missed once in the trailing four quarters, the average surprise being 2.3%.
ITT Inc. (ITT - Free Report) has an Earnings ESP of +0.11% and a Zacks Rank of 2 at present. The company is scheduled to release second-quarter 2025 results on July 31. ITT’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 1.7%.
Emerson Electric Co. (EMR - Free Report) has an Earnings ESP of +0.46% and a Zacks Rank of 3 at present. Emerson is scheduled to release third-quarter fiscal 2025 results on Aug. 6. EMR’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 3.4%.
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Honeywell Gears Up to Report Q2 Earnings: Is a Beat in Store?
Key Takeaways
Honeywell International Inc. (HON - Free Report) is scheduled to release second-quarter 2025 results on July 24, before market open.
The Zacks Consensus Estimate for HON’s second-quarter revenues is pegged at $10 billion, indicating growth of 4.6% from the prior-year quarter’s figure. The consensus mark for earnings is pinned at $2.64 per share, which has edged up 1.1% in the past 60 days. The figure indicates a growth of 6% from the year-ago quarter's figure.
The company delivered better-than-expected results in each of the trailing four quarters, the earnings surprise being 6.6% on average. In the last reported quarter, its bottom line beat the consensus estimate by 13.6%.
Let us see how things have shaped up for Honeywell this earnings season.
Factors Likely to Have Shaped HON’s Quarterly Performance
Strong momentum in Honeywell’s commercial aviation aftermarket business, driven by robust demand in the air transport and business aviation markets, is expected to have supplemented the top-line performance of its Aerospace Technologies segment. Strength in the defense and space business, owing to stable U.S. and international defense spending volumes, is likely to have been a tailwind as well. We expect the segment’s revenues to increase 10.1% year over year to $4.28 billion in the second quarter.
Solid demand for its products and solutions, supported by a strong pipeline of building projects, particularly in North America and the Middle East, is expected to augment the Building Automation segment’s results. Increasing order rates across data centers, airports and healthcare markets are also anticipated to have boosted its performance. Our estimate for revenues from the Building Automation segment is pegged at $1.71 billion, indicating a decrease of 8.8% year over year.
The Energy and Sustainability Solutions segment is expected to have witnessed a year-over-year increase in revenues, driven by strength in the Universal Oil Products business, on account of higher refining and petrochemicals projects. We expect the segment’s revenues to increase 1.8% year over year to $1.63 billion in the second quarter.
However, Honeywell’s Industrial Automation Solutions segment is expected to have put up a weak show in the quarter due to persistent weakness in the sensing and safety technologies businesses. Softness in the process solutions business, due to lower demand for smart energy and thermal solutions, is also expected to have been a spoilsport. For the second quarter, our estimate for revenues from the Industrial Automation segment is pegged at $2.36 billion, indicating a year-over-year decline of 5.7%.
Over time, HON’s performance has been negatively impacted by high costs and expenses. The company’s investments in digital infrastructure and business integration activities are expected to have pushed up its operating expenses, which are likely to have reflected in its margins. We expect HON’s cost of sales to increase 5.1% year over year to $6.1 billion and the operating margin to decline 180 basis points to 18.8% in the second quarter.
Honeywell International Inc. Price and EPS Surprise
Honeywell International Inc. price-eps-surprise | Honeywell International Inc. Quote
Earnings Whispers
Our proven model predicts an earnings beat for HON this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: HON has an Earnings ESP of + 0.58% as the Most Accurate Estimate is pegged at $2.66 per share, which is higher than the Zacks Consensus Estimate of $2.64. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: HON currently carries a Zacks Rank of 3.
Other Stocks to Consider
Here are some other companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
Carlisle Companies Incorporated (CSL - Free Report) has an Earnings ESP of +0.39% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CSL is slated to release second-quarter 2025 results on July 30. Carlisle’s earnings surpassed the Zacks Consensus Estimate thrice and missed once in the trailing four quarters, the average surprise being 2.3%.
ITT Inc. (ITT - Free Report) has an Earnings ESP of +0.11% and a Zacks Rank of 2 at present. The company is scheduled to release second-quarter 2025 results on July 31. ITT’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 1.7%.
Emerson Electric Co. (EMR - Free Report) has an Earnings ESP of +0.46% and a Zacks Rank of 3 at present. Emerson is scheduled to release third-quarter fiscal 2025 results on Aug. 6. EMR’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 3.4%.