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Honeywell International Inc. (HON - Free Report) reported second-quarter 2024 adjusted earnings of $2.49 per share, which surpassed the Zacks Consensus Estimate of $2.42. The bottom line inched up 8% year over year on an adjusted basis. On a reported basis, the company’s earnings were $2.36 per share, indicating an increase of 6%.
Total revenues of $9.1 billion beat the consensus estimate of $9.4 billion. The top line inched up 5% from the year-ago quarter driven by strength in the Aerospace Technologies segment. Organic sales also increased 4% year over year.
Segmental Details
In October 2023, HON planned to realign its business segments to three megatrends, which were automation, the future of aviation and energy transition. Beginning in the second quarter of 2024, the company started operating under the segments discussed below.
Aerospace Technologies’ quarterly revenues were $3.9 billion, up 16% year over year. Growth in both commercial aviation and defense and space markets drove revenues. Our estimate for Aerospace Technologies’ revenues was $3.8 billion.
Industrial Automation revenues fell 8% year over year to $2.5 billion due to volume softness in warehouse and workflow solutions. Our estimate for segmental revenues was pegged at $2.5 billion.
Building Automation revenues totaled $1.6 billion, up 4% year over year. Its revenues increased due to ongoing strength in the building solutions business. Our estimate for the segment’s revenues was $1.5 billion.
Energy and Sustainability Solutions’ revenues increased 2% to $1.6 billion due to strength in the advanced materials business and increased demand for fluorine products. Our estimate for the segment’s revenues was $1.6 billion.
Honeywell International Inc. Price, Consensus and EPS Surprise
The company’s total cost of sales (cost of products and services) was $5.9 billion, up 4.2% year over year. Selling, general and administrative expenses were $1.4 billion, up 7.8%. Interest expenses and other financial charges were $250 million compared with $187 million a year ago.
Operating income was $2 billion, up 5.1% year over year. The operating income margin was 20.7% compared with 20.6% in the year-ago period.
Balance Sheet/Cash Flow
Honeywell had cash and cash equivalents of $9.6 billion compared with $7.9 billion at the end of December 2023. Long-term debt was $20.9 billion, higher than $16.6 billion in 2023 end.
In the second quarter, it generated net cash of $1.37 billion from operating activities compared with $1.36 billion in the prior year. Capital expenditure totaled $259 million in the second quarter compared with $233 million in the previous year.
Free cash flow was $1.11 billion in the second quarter compared with $1.13 billion cash flow in the year-ago period.
2024 Guidance Raised
For 2024, Honeywell expects sales of $39.1-$39.7 billion compared with the prior expected range of $38.1-$38.9 billion, whereas it reported sales of $36.7 billion in 2023. The Zacks Consensus Estimate for revenues is pegged at $38.66 billion. Organic sales are expected to increase 5-6%.
HON expects a segment margin in the band of 23.3-23.5% compared with 22.7% in 2023. Adjusted earnings per share are expected to be between $10.05 and $10.25, higher than $9.16 in 2023. The consensus estimate for earnings is pegged at $10.23 per share. Free cash flow is expected to be around $5.5-$5.9 billion.
Pentair plc (PNR - Free Report) reported second-quarter adjusted earnings per share of $1.22, which beat the Zacks Consensus Estimate of $1.15. The reported figure also improved 18% from the year-ago quarter.
Net revenues rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the consensus estimate of $1.09 billion.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted earnings per share of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line improved 8% year over year.
Net revenues totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the consensus estimate of $3.06 billion.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.06 per share missed the Zacks Consensus Estimate of $1.07. However, the bottom line increased 5% on a year-over-year basis.
Net revenues of $1.02 billion surpassed the consensus estimate of $992 million. The top line increased 7% year over year, driven by strong demand for residential and commercial water heaters in North America.
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Honeywell (HON) Q2 Earnings Beat, Aerospace Sales Rise Y/Y
Honeywell International Inc. (HON - Free Report) reported second-quarter 2024 adjusted earnings of $2.49 per share, which surpassed the Zacks Consensus Estimate of $2.42. The bottom line inched up 8% year over year on an adjusted basis. On a reported basis, the company’s earnings were $2.36 per share, indicating an increase of 6%.
Total revenues of $9.1 billion beat the consensus estimate of $9.4 billion. The top line inched up 5% from the year-ago quarter driven by strength in the Aerospace Technologies segment. Organic sales also increased 4% year over year.
Segmental Details
In October 2023, HON planned to realign its business segments to three megatrends, which were automation, the future of aviation and energy transition. Beginning in the second quarter of 2024, the company started operating under the segments discussed below.
Aerospace Technologies’ quarterly revenues were $3.9 billion, up 16% year over year. Growth in both commercial aviation and defense and space markets drove revenues. Our estimate for Aerospace Technologies’ revenues was $3.8 billion.
Industrial Automation revenues fell 8% year over year to $2.5 billion due to volume softness in warehouse and workflow solutions. Our estimate for segmental revenues was pegged at $2.5 billion.
Building Automation revenues totaled $1.6 billion, up 4% year over year. Its revenues increased due to ongoing strength in the building solutions business. Our estimate for the segment’s revenues was $1.5 billion.
Energy and Sustainability Solutions’ revenues increased 2% to $1.6 billion due to strength in the advanced materials business and increased demand for fluorine products. Our estimate for the segment’s revenues was $1.6 billion.
Honeywell International Inc. Price, Consensus and EPS Surprise
Honeywell International Inc. price-consensus-eps-surprise-chart | Honeywell International Inc. Quote
Costs/Margins
The company’s total cost of sales (cost of products and services) was $5.9 billion, up 4.2% year over year. Selling, general and administrative expenses were $1.4 billion, up 7.8%. Interest expenses and other financial charges were $250 million compared with $187 million a year ago.
Operating income was $2 billion, up 5.1% year over year. The operating income margin was 20.7% compared with 20.6% in the year-ago period.
Balance Sheet/Cash Flow
Honeywell had cash and cash equivalents of $9.6 billion compared with $7.9 billion at the end of December 2023. Long-term debt was $20.9 billion, higher than $16.6 billion in 2023 end.
In the second quarter, it generated net cash of $1.37 billion from operating activities compared with $1.36 billion in the prior year. Capital expenditure totaled $259 million in the second quarter compared with $233 million in the previous year.
Free cash flow was $1.11 billion in the second quarter compared with $1.13 billion cash flow in the year-ago period.
2024 Guidance Raised
For 2024, Honeywell expects sales of $39.1-$39.7 billion compared with the prior expected range of $38.1-$38.9 billion, whereas it reported sales of $36.7 billion in 2023. The Zacks Consensus Estimate for revenues is pegged at $38.66 billion. Organic sales are expected to increase 5-6%.
HON expects a segment margin in the band of 23.3-23.5% compared with 22.7% in 2023. Adjusted earnings per share are expected to be between $10.05 and $10.25, higher than $9.16 in 2023. The consensus estimate for earnings is pegged at $10.23 per share. Free cash flow is expected to be around $5.5-$5.9 billion.
Zacks Rank
The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Companies
Pentair plc (PNR - Free Report) reported second-quarter adjusted earnings per share of $1.22, which beat the Zacks Consensus Estimate of $1.15. The reported figure also improved 18% from the year-ago quarter.
Net revenues rose 1.6% year over year to $1.1 billion. PNR’s top line outpaced the consensus estimate of $1.09 billion.
Crown Holdings, Inc. (CCK - Free Report) reported second-quarter adjusted earnings per share of $1.81, which beat the Zacks Consensus Estimate of $1.59. The bottom line improved 8% year over year.
Net revenues totaled $3.04 billion, down 2.2% from the year-ago quarter. The top line missed the consensus estimate of $3.06 billion.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter adjusted earnings of $1.06 per share missed the Zacks Consensus Estimate of $1.07. However, the bottom line increased 5% on a year-over-year basis.
Net revenues of $1.02 billion surpassed the consensus estimate of $992 million. The top line increased 7% year over year, driven by strong demand for residential and commercial water heaters in North America.