10-QPeriod: Q2 FY2022

HONEYWELL INTERNATIONAL INC Quarterly Report for Q2 Ended Jun 30, 2022

Filed July 28, 2022For Securities:HONHONIV

Summary

Honeywell International Inc. reported its financial results for the second quarter and first half of fiscal year 2022. For the second quarter, net sales were $8.95 billion, a slight increase of 2% year-over-year, driven by favorable pricing initiatives that offset rising material and labor costs, as well as supply chain disruptions. Net income attributable to Honeywell was $1.26 billion, or $1.84 per diluted share, a decrease from the prior year, impacted by higher repositioning and other charges, including costs related to the suspension and wind-down of operations in Russia. The first half of the year saw net sales of $17.33 billion, a marginal increase of 0.4% year-over-year. Net income attributable to Honeywell for the first six months was $2.40 billion, or $3.48 per diluted share, also lower than the previous year. The company highlighted the persistent challenges of inflation, supply chain constraints, and the ongoing conflict in Ukraine as key factors influencing its performance. Despite these headwinds, Honeywell continues to focus on pricing strategies to mitigate cost increases and maintain profitability.

Financial Highlights

55 data points
Beta

Revenue

$8.95B

36.8% Gross Margin

Net Income

$1.26B

14.1% Net Margin

EPS (Diluted)

$1.84

Total Assets

$62.26B

Cash & Equivalents

$8.25B

Free Cash Flow

$631.00M

Financial Statements
Beta
Revenue$8.95B
Cost of Revenue$5.66B
Gross Profit$3.29B
R&D Expenses$386.00M
SG&A Expenses$1.31B
Operating Income$1.87B
Net Income$1.26B
EPS (Basic)$1.86
EPS (Diluted)$1.84
Shares Outstanding (Basic)679.00M
Shares Outstanding (Diluted)685.00M

Key Highlights

  • 1Net sales for Q2 2022 were $8.95 billion, up 2% year-over-year, driven by price increases offsetting volume declines and foreign currency headwinds.
  • 2Net income attributable to Honeywell for Q2 2022 was $1.26 billion, resulting in diluted EPS of $1.84, down from $2.04 in Q2 2021.
  • 3For the six months ended June 30, 2022, net sales were $17.33 billion, a slight increase of 0.4% year-over-year.
  • 4Six-month net income attributable to Honeywell was $2.39 billion, resulting in diluted EPS of $3.48, down from $4.06 in the prior year.
  • 5The company incurred significant repositioning and other charges totaling $614 million for the first half of 2022, including charges related to the suspension and wind-down of operations in Russia.
  • 6The Aerospace segment showed resilience, with net sales up 5% in Q2 and 5% year-to-date, driven by aftermarket demand and favorable pricing.
  • 7The Safety and Productivity Solutions segment experienced a 12% decrease in Q2 net sales due to lower volumes, particularly in Safety and Retail and Warehouse and Workflow Solutions.

Frequently Asked Questions

Revenue growth was primarily driven by favorable pricing initiatives aimed at offsetting higher direct and indirect material and labor costs. This was partially offset by lower sales volumes in the Safety and Productivity Solutions segment and the unfavorable impact of foreign currency translation due to a strengthening U.S. Dollar.

The company incurred substantial repositioning and other charges, totaling $614 million for the first six months of 2022. This includes charges related to workforce reductions, asset impairments, exit costs, and specifically, expenses and accrual of reserves due to the suspension and wind-down of operations in Russia and Belarus.

The Aerospace segment saw sales growth driven by aftermarket demand and pricing. Honeywell Building Technologies reported increased sales due to pricing and volume. Performance Materials and Technologies also experienced sales growth, primarily from favorable pricing and demand in Advanced Materials, despite impacts from the Russia-Ukraine conflict. The Safety and Productivity Solutions segment saw a decline in sales due to lower volumes, particularly in personal protective equipment and warehouse solutions.

Honeywell maintains a strong liquidity position with $8.25 billion in cash and cash equivalents as of June 30, 2022. The company has access to committed credit lines and the public debt and equity markets, and it generated $825 million in net cash from operating activities for the first six months of 2022, although this was a decrease from the prior year. Principal future cash needs include capital expenditures, share repurchases, dividends, acquisitions, and debt repayments.