Honeywell (NASDAQ: HON) had an excellent third quarter, meeting or exceeding the company's guidance on various performance metrics. Sales were up 9% in the third quarter, with organic sales up 8%. At the same time, Honeywell continues to achieve strong growth in China, where the very favorable investment environment presents great opportunities for the company.
Honeywell (NASDAQ: HON) had an excellent third quarter, meeting or exceeding the company's guidance on various performance metrics. Sales were up 9% in the third quarter, with organic sales up 8%. At the same time, Honeywell continues to achieve strong growth in China, where the very favorable investment environment presents great opportunities for the company.
"We continued our strong performance in the third quarter, with all four business groups delivering sales growth, strong profit growth and excellent execution even in the face of a challenging supply chain environment," said Darius Adamczyk, Chairman and CEO of Honeywell.
"Aftermarket sales growth of 38% in the Aerospace business Group, 21% in the Safety and Productivity Solutions Group, and 29% and 14% in the Characteristic Materials and Technology Group UOP and Performance Materials businesses, respectively, combined to drive organic sales growth of 8%. In addition, our focus on operational management excellence and sales excellence led to segment margin improvement of 130 basis points to 21.2%, 60 basis points above the upper end of the guidance range. As a result, adjusted earnings per share reached $2.02, up 29% year-over-year and at the upper end of the guidance range for the third quarter. Cash performance was strong in the quarter and continued to deliver on cash flow commitments for the full year. "We continue to execute on our capital deployment strategy, repurchasing $700 million of stock, announcing our 12th dividend increase in the last 11 years, and successfully acquiring Performix to expand our portfolio of automation solutions in the life sciences industry."
"Honeywell's China business continues to be strong, with high single-digit year-over-year sales growth in the third quarter and no slowdown in sight. Honeywell continues to have a strong market position in China, "said Durich at the company's third-quarter earnings briefing. He also said that the current investment environment and business opportunities in the Chinese market are very favorable, and the focus on sustainable development in China also brings great opportunities for Honeywell, "we are very excited about it."
The company's disciplined productivity and pricing systems helped deliver strong results in the third quarter despite uncertainties in the global environment, including supply chain constraints, rising raw material inflation, and a challenging labor market. The company will continue to focus its efforts in the fourth quarter on addressing these challenges and fully capitalizing on short-term growth opportunities emerging in its business portfolio.
Honeywell updated its guidance for the full year to reflect the continued impact of the challenging macro environment and third-quarter results. Full year sales are expected to be in the range of $34.2 billion to $34.6 billion, organic sales growth is expected to be in the range of 4% to 5%, and segment margins are expected to be in the range of 20.9% to 21.1%, due to supply chain constraints, among other factors. Adjusted earnings per share are expected to be $8.00 to $8.10. Operating cash flow is still expected to be in the range of $5.9 billion to $6.2 billion, and free cash flow is also expected to be in the range of $5.3 billion to $5.6 billion.
