Honeywell International (HON) Beats Expectations with $10.1B in Q4 Sales

Honeywell International Inc. (NASDAQ: HON) reported a solid performance for the fourth quarter of 2024, with sales reaching $10.1 billion, marking a 7% increase compared to the same period in the previous year. The company’s organic sales grew by 2%, excluding the impact of a significant agreement with Bombardier, which had a notable effect on the financials.

This growth was particularly driven by strong performance in defense and space, as well as building solutions, which saw double-digit organic sales growth. Despite a challenging macroeconomic environment, Honeywell’s backlog grew 11% to a record $35.3 billion, showcasing the company’s ability to secure future business.

Honeywell Reports Double Beat for Fourth-Quarter 2024

Earnings per share (EPS) for the quarter were reported at $1.96, representing a 3% increase year over year. However, adjusted EPS showed a decline of 8% to $2.47, although this figure exceeded the previous guidance. The adjusted EPS would have increased by 9% if not for the $0.45 impact of the Bombardier agreement. Operating income saw a 10% rise, while the operating margin expanded by 50 basis points to 17.3%. Segment profit decreased by 8% to $2.1 billion, with the segment margin contracting by 350 basis points to 20.9%.

The company’s cash flow from operations stood at $2.3 billion, down 23% from the previous year, and free cash flow was reported at $1.9 billion, a 27% decrease. Despite these declines, the company’s overall performance in the fourth quarter was strong, with several business segments contributing positively to the results.

When comparing Honeywell’s performance to market expectations, the company exceeded the anticipated revenue of $9.97 billion, achieving $10.1 billion in sales for the fourth quarter. This represents a notable achievement, as Honeywell managed to surpass the expectations despite facing various economic challenges.

Regarding earnings per share, the anticipated EPS was $2.46, and Honeywell reported an adjusted EPS of $2.47, slightly surpassing expectations. While the adjusted EPS showed a decline compared to the previous year, it still managed to exceed the guidance provided earlier.

The company’s ability to exceed both revenue and EPS expectations demonstrates effective management and strategic execution. Honeywell’s leadership, under CEO Vimal Kapur, expressed confidence in the company’s revitalized portfolio optimization strategy and operational excellence, which are expected to drive further value creation for stakeholders.

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Honeywell Anticipates EPS in the Range of $10.10 to $10.50

Honeywell has issued guidance that reflects cautious optimism. The company expects sales to range between $39.6 billion and $40.6 billion, with organic sales growth projected at 2% to 5%. This indicates a steady outlook for growth, driven by continued strength in key business areas and strategic initiatives.

Honeywell anticipates an adjusted EPS for 2025 in the range of $10.10 to $10.50, representing an increase of 2% to 6%. The company also expects operating cash flow to be between $6.7 billion and $7.1 billion, with free cash flow projected at $5.4 billion to $5.8 billion.

The company’s guidance assumes a mid-year close of the sale of its Personal Protective Equipment business, which is expected to further streamline operations and enhance focus on core areas.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.