Honeywell Declines 7.6% on Disappointing Q4 Results

Honeywell International, Inc. (HON) has delivered lower-than-expected Q4 results due to disappointing sales growth in most of its segments. The company’s shares fell 7.6% on Thursday but gained 1.2% in the extended trading session.

Honeywell is a technology and manufacturing company that delivers industry-specific solutions, including aerospace products and services; control technologies for buildings and homes; and performance materials.

Q4 Performance

Q4 EPS increased 7.3% from the same quarter last year to $2.05 but missed consensus estimates of $2.08. Sales during the quarter were down 3% year-over-year to $8.66 billion, falling short of consensus estimates of $8.74 billion.

Organic sales declined 2% on the back of a 3% fall in Aerospace sales. Additionally, Honeywell witnessed a 6% drop in Safety and Productivity Solutions and a 1% decline in Honeywell Building Technologies.

Operating income margin during the quarter declined by 130 basis points to 17.5%, while Segment margins improved by 30 basis points to 21.4%. The company reported a closing backlog of $28 billion, up 7% from the last year’s quarter.

2021 Performance

For the full year, sales rose by 5% to $34.4 billion. Also, the company reported earnings per share of $7.91, up 17.7% from the same quarter last year.

During the year, Honeywell spent $8.5 billion on share buybacks, dividends, capital expenditures, and acquisitions.

Outlook

For full-year 2022, Honeywell is projecting sales in the range of $35.4 billion to $36.4 billion, with organic sales expected to grow by between 4% and 7%. Adjusted EPS should range between $8.40 and $8.70, with operating cash flow expected between $5.7 billion and $6.1 billion.

The Chairman and CEO of Honeywell, Darius Adamczyk, said, “We entered 2022 with positive momentum and a strong backlog, and I am confident we are well positioned to continue to perform for our shareowners, our customers, and our employees in the short and long term.”

Stock Rating

Consensus among analysts is a Moderate Buy based on 5 Buys and 6 Holds. The average Honeywell price target of $237.18 implies 23.7% upside potential. Shares have tanked 6.5% over the past year.

Positive Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Honeywell, as 8.9% of investors increased their exposure to HON stock over the past 30 days.

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