Honeywell shares slip 3% in pre-market as company misses on the top line
1min read Honeywell International, a global technology and manufacturing company, reported its earnings for the fourth quarter of the year. The company's earnings per share (EPS) came in at $2.60, beating market expectations by $0.01. Revenues for the quarter rose 2.8% year-over-year to reach $9.44 billion, slightly below consensus.
Honeywell saw growth in several key segments. Aerospace sales, fueled by strength in commercial aviation and defense and space, increased 15% year-over-year on an organic basis. Building Technologies sales were down 1% organically, primarily due to lower volumes in fire and security offerings. Performance Materials and Technologies sales grew 4% organically, with Advanced Materials and HPS leading the way. Safety and Productivity Solutions sales declined by 24% organically, impacted by lower volumes in warehouse and workflow solutions.
The company's bottom line performance was driven by its solid operating cash flow and free cash flow. Operating cash flow for the quarter was $3.0 billion, resulting in an operating cash flow margin of 31.3%. Meanwhile, free cash flow was $2.6 billion, with a free cash flow margin of 27.4%. This was primarily due to a reduction in working capital.
Honeywell's backlog, which represents its contracted but unfilled orders, remained at a record level, ending the year up 8% at $31.8 billion. This provides support for the company's outlook and indicates continued strong demand for its products and services.
Looking ahead, Honeywell issued its guidance for the fiscal year 2024. The company expects EPS in the range of $9.80 to $10.10, in line with analyst expectations. It also projects revenues of $38.1 billion to $38.9 billion, which fell short of consensus.
Honeywell anticipates organic sales growth of 4% to 6% in 2024, driven by robust long-cycle markets and a further boost from the short-cycle recovery. The company expects operating cash flow of $6.7 billion to $7.1 billion and free cash flow of $5.6 billion to $6.0 billion.
The announcement also included updates on leadership changes within the company. Vimal Kapur will succeed Darius Adamczyk as Chairman of the Board in June 2024, while William S. Ayer will become independent Lead Director in May 2024. Throughout the fourth quarter,
Honeywell's strong financial results and positive outlook demonstrate the company's ability to navigate challenging market conditions and capitalize on opportunities for growth. With its record backlog and a favorable market environment, Honeywell is well-positioned for continued success in the coming year.
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