Honeywell posts Q1 earnings beat as aviation demand flies higher
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Honeywell (NASDAQ:HON) +1.8% pre-market Friday after reporting better than expected Q1 adjusted earnings, while also raising guidance for full-year earnings and revenue.
Q1 net income fell to $1.13B, or $1.64/share, from $1.45B, or $2.03/share, in the year-earlier quarter.
Q1 revenues fell by nearly 1% to $8.38B but up 1% on an organic basis and at the high end of the company's previous guidance.
Q1 operating margin contracted by 260 basis points to 15.2% due to a $183M charge related to the substantial suspension of operations in Russia, which translated to a ~$30M loss in sales.
Q1 organic sales by segment: Aerospace +5% Y/Y to $2.75B, Performance Materials and Technologies +6% to $2.45B, Safety and Productivity Solutions -15% to $1.74B, Building Technologies +8% to $1.43B.
Honeywell (HON) said Safety and Productivity Solutions sales declined partly because of lower personal protective equipment volume.
In the Aerospace segment, both air transport aftermarket and business and general aviation aftermarket sales grew by over 25% as flight hours continued to improve.
Total closing backlog rose 9% Y/Y to $28.5B; orders increased 13%.
For FY 2022, the company raised guidance for adjusted EPS to $8.50-$8.80 from $8.40-$8.70, in line with $8.60 analyst consensus estimate; revenues are seen coming in at $35.5B-$36.4B vs. $35.4B-$36.4B previously, in line with $36B consensus.
Operating cash flow is projected in the $5.7B-$6.1B range, and free cash flow is expected at $4.7B-$5.1B.
For Q2, the company expects to earn $2.03/share.
Honeywell's (HON) stock price return has declined 9% YTD and 14% during the past year.