Honeywell International Inc (HON) Posts Solid Q4 and Full Year 2023 Results; Sets Positive 2024 ...
Q4 Adjusted Earnings Per Share: $2.60, surpassing guidance.
Q4 Sales: $9.4 billion, with organic growth of 2%.
Full Year Free Cash Flow: $4.3 billion, at the upper end of guidance.
Capital Deployment: $8.3 billion in share repurchases, dividends, capital expenditures, and M&A.
2024 Adjusted Earnings Per Share Guidance: $9.80 - $10.10, indicating a 7% - 10% increase.
Record Backlog: Ending the year up 8% at $31.8 billion.
On February 1, 2024, Honeywell International Inc (NASDAQ:HON) released its 8-K filing, announcing its fourth-quarter and full-year results for 2023, which met or exceeded the company's original full-year guidance. Honeywell, a global conglomerate known for its aerospace products and services, building technologies, performance materials, and safety solutions, reported a 3% increase in fourth-quarter sales to $9.4 billion and a 2% organic sales growth. The company's full-year operating cash flow reached $5.3 billion, with free cash flow at $4.3 billion, aligning with the high end of previous guidance.
Financial Performance and Strategic Moves
Honeywell's fourth-quarter earnings per share (EPS) stood at $1.91, a 26% year-over-year increase, while adjusted EPS reached $2.60, up 3% from the previous year. The adjusted EPS figure, which excludes a significant adjustment to the estimated future Bendix liability, reflects an 8% increase when also excluding a non-cash pension headwind. The company's operating cash flow for the quarter was robust at $3.0 billion, with a free cash flow of $2.6 billion, driven by a reduction in working capital.
Throughout 2023, Honeywell deployed $8.3 billion in capital towards share repurchases, dividends, capital expenditures, and mergers and acquisitions, including the significant $5 billion acquisition of Carrier's Global Access Solutions business, which is expected to enhance Honeywell's building automation capabilities.
Segment Highlights and 2024 Outlook
Aerospace continued to be a strong performer with double-digit organic sales growth, particularly in commercial aviation. Performance Materials and Technologies also saw organic sales growth, led by advanced materials and smart energy solutions. However, Safety and Productivity Solutions experienced a decline due to lower volumes in warehouse and workflow solutions.
Looking ahead to 2024, Honeywell anticipates sales between $38.1 billion and $38.9 billion, representing an organic growth of 4% to 6%. The company expects segment margin expansion of 30 to 60 basis points and an adjusted EPS of $9.80 to $10.10, marking a 7% to 10% increase. Operating cash flow is projected to be between $6.7 billion and $7.1 billion, with free cash flow estimated at $5.6 billion to $6.0 billion.
Conclusion
Honeywell's performance in 2023 and its positive outlook for 2024 reflect the company's strategic positioning and operational excellence. With a record backlog and a focus on megatrends such as automation, the future of aviation, and energy transition, Honeywell is poised for continued growth and value creation for its shareholders, customers, and employees.
For a more detailed analysis of Honeywell's financial results and future prospects, investors and interested parties are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Honeywell International Inc for further details.
This article first appeared on GuruFocus.
