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Honeywell's (HON) Q2 Earnings, Revenues Top Estimates, Up Y/Y

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Honeywell International Inc. HON has reported better-than-expected second-quarter 2021 results, wherein both earnings and revenues surpassed estimates.

Earnings & Revenues

Adjusted earnings were $2.02 per share, surpassing the Zacks Consensus Estimate of $1.94. The bottom line surged 60.3% year over year.

Honeywell’s second-quarter revenues were $8,808 million, outpacing the consensus estimate of $8,605 million. The top line increased 17.8% year over year on a reported basis and 15% on an organic basis. The rise was driven by strength in personal protective equipment and productivity solutions and services businesses along with strong demand for building products and process solutions products, as well as solid recovery in business and general aviation aftermarket demand.

Segmental Breakup

Coming to operating segments, Aerospace’s quarterly revenues were $2,766 million, up 9% year over year. Honeywell Building Technologies’ revenues increased 20% to $1,407 million. Performance Materials and Technologies’ revenues totaled $2,552 million, up 15%, while that for Safety and Productivity Solutions increased 35% to $2,083 million.

Costs/Margins

The company’s total cost of sales in the reported quarter was $6,003 million, up 13.8% year over year. Selling, general and administrative expenses were $1,207 million, up 2%. Interest expenses and other financial charges were $83 million compared with $90 million a year ago.

Operating income in the second quarter were $1,598 million, up 57% on a year-over-year basis. Operating income margin was 18.1%, up 450 basis points.

Balance Sheet/Cash Flow

Exiting the second quarter of 2021, Honeywell had cash and cash equivalents of $11,427 million compared with $11,718 million in the previous quarter. Long-term debt was $16,138 million, higher than $16,124 million recorded at the end of the previous quarter.

In the first six months of 2021, the company generated $2,256 million in cash from operating activities compared with $2,419 million in the year-ago period. In the first half of 2021, capital expenditure was $406 million compared with $366 million incurred a year ago.

Free cash flow in the quarter was $1,468 million, up 17% year over year.

Outlook

Honeywell updated guidance for full-year 2021. For the year, the company anticipates earnings to be in the range of $7.95 to $8.10 per share, higher than $7.75 to $8.00 guided earlier. It anticipates revenues to be between $34.6 billion and $35.2 billion, with organic revenues expected to be up 4-6%. It previously anticipated revenues to lie in the range of $34 billion and $34.8 billion.

For 2021, it expects operating cash flow in the range of $5.9 billion to $6.2 billion, and free cash flow to be between $5.3 billion and $5.6 billion.

Honeywell International Inc. Price, Consensus and EPS Surprise

Honeywell International Inc. Price, Consensus and EPS Surprise
Honeywell International Inc. Price, Consensus and EPS Surprise

Honeywell International Inc. price-consensus-eps-surprise-chart | Honeywell International Inc. Quote

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are Griffon Corporation GFF, ITT Inc. ITT and 3M Company MMM, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Griffon delivered an earnings surprise of 122.71%, on average, in the trailing four quarters.

ITT delivered an earnings surprise of 26.36%, on average, in the trailing four quarters.

3M delivered an earnings surprise of 9.85%, on average, in the trailing four quarters.


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Honeywell International Inc. (HON) : Free Stock Analysis Report

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Griffon Corporation (GFF) : Free Stock Analysis Report

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