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Sep 30, 2022
Honeywell Q3 2022 Earnings Report
Honeywell's third quarter results met or exceeded guidance, with raised full-year outlook.
Key Takeaways
Honeywell's Q3 2022 results showcased strong performance, exceeding guidance for segment margin and earnings. The company reported a 6% increase in sales and a 9% organic growth. As a result of the company's third-quarter performance and management's outlook for the remainder of the year, full-year sales are now expected to be in the range of $35.4 billion to $35.7 billion.
Operating Margin increased by 90 Basis Points to 19.5%; Segment Margin increased by 60 Basis Points to 21.8%, exceeding the high end of guidance range by 60 bps.
Earnings Per Share reached $2.28, with Adjusted EPS at $2.25, surpassing the high end of guidance range by 5 Cents.
Operating Cash Flow surged by 86% to $2.1 Billion; Free Cash Flow increased by 108% to $1.9 Billion.
The company deployed $1.2 Billion of Capital towards Share Repurchases, Dividends, and Capital Expenditures and raised midpoint of organic sales growth
Revenue by Segment
Forward Guidance
Honeywell has updated its full-year 2022 guidance.
Positive Outlook
- Full-year sales are expected to be in the range of $35.4B to $35.7B.
- Organic growth is projected to be 6% to 7%.
- Excluding the impact of COVID-driven mask sales declines and lost Russian sales, organic growth is expected to be 8% to 9%.
- Segment margin expansion is anticipated to be in the range of 60 to 80 basis points.
- Adjusted earnings per share are forecast to be in the range of $8.70 to $8.80.
Challenges Ahead
- Operating cash flow is expected to be in the range of $5.2B to $5.6B.
- Free cash flow is expected to be $4.7B to $5.1B.
- Segment margin expansion includes an approximate (30) basis point impact from investments in the Quantinuum business.
- The guidance excludes potential future one-time items that are difficult to predict.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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