01—Abstract
Summary
Summary of the 10-K filed February 10, 2023. Cited figures are marked; the original filing is the authoritative source.
Honeywell International Inc. reported solid performance in 2022, navigating macroeconomic challenges like supply chain disruptions and inflation through strategic pricing and operational adjustments.
The company achieved a 3% reported sales growth (6% organically), reaching $35.5 billiona in backlog, which bodes well for future revenue conversion. Key strategic objectives include driving profitable growth through innovation, expanding its software-industrial capabilities with Honeywell Forge, and optimizing operational performance.
The company demonstrated financial discipline by deploying $7.9 billionb in capital towards expenditures, dividends, and share repurchases, exceeding operating cash flow. Looking ahead, Honeywell anticipates continued market turbulence but remains confident in its robust backlog and diversified business segments to deliver future growth, with a focus on high-return opportunities in software and sustainable technologies.
02—Key points
Key Highlights
- Total sales increased by 3% to $35.466 billion, with organic sales up 6% (or 7% excluding lost Russian sales).
- Record backlog of $29.6 billion at the end of 2022, indicating strong future demand across key end markets.
- Aerospace segment saw sales increase by 7% year-over-year, driven by commercial aviation aftermarket and original equipment.
- Honeywell Building Technologies achieved 8% sales growth, benefiting from increased pricing and higher volumes in its products and building solutions.
- Performance Materials and Technologies reported a 7% sales increase, primarily due to pricing actions in Advanced Materials and Process Solutions.
- Safety and Productivity Solutions experienced a 12% sales decline, largely attributed to reduced demand for warehouse automation and personal protective equipment.
- The company deployed $7.9 billion in capital for expenditures, dividends, and share repurchases, underscoring a commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Honeywell International kept $0.14.
- Revenue$35.47B100.0%
- Cost of revenue−$22.35B63.0%
- Gross profit$13.12B37.0%
- Operating costs−$5.10B14.4%
- Operating income$8.02B22.6%
- Interest, other & tax−$3.06B8.6%
- Net income$4.97B14.0%
04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 10, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $35.47B$34.39B | +3.1% |
| Cost of Revenue | $22.35B$22.06B | +1.3% |
| Gross Profit | $13.12B$12.33B | +6.4% |
| R&D Expenses | $1.48B$1.33B | +10.9% |
| SG&A Expenses | $5.21B$4.80B | +8.7% |
| Operating Income | $8.02B— | — |
| Net Income | $4.97B$5.54B | −10.4% |
| EPS (Basic) | $7.33$8.01 | −8.5% |
| EPS (Diluted) | $7.27$7.91 | −8.1% |
| Shares Outstanding (Basic) | 677.10M692.30M | −2.2% |
| Shares Outstanding (Diluted) | 683.10M700.40M | −2.5% |
05—Questions
Frequently Asked Questions
What was Honeywell's overall financial performance in 2022?
Honeywell reported a 3% increase in net sales to $35.466 billion, with organic sales growing by 6% (or 7% excluding lost Russian sales). The company also ended the year with a record backlog of $29.6 billion, signaling strong future demand.
Which business segments performed the strongest and weakest in 2022?
The Aerospace segment showed strong performance with a 7% sales increase, driven by commercial aviation. Honeywell Building Technologies also performed well, with an 8% sales growth. The Safety and Productivity Solutions segment, however, saw a 12% decrease in sales due to lower demand in specific product lines.
How did Honeywell manage inflationary pressures and supply chain disruptions?
Honeywell implemented strategies such as strategic pricing actions, enhanced demand forecasting, closer supplier engagement for larger orders, and product re-engineering to mitigate the impact of inflation and supply chain constraints. These measures helped protect profitability.
What is Honeywell's outlook for 2023?
The company anticipates continued macroeconomic turbulence in 2023 but is confident in its ability to grow, supported by its substantial backlog and diversified business model. Honeywell plans to continue investing in software and sustainable technologies for future growth.
06—Continue