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Honeywell International 8-K Report, Financial Results (Jun 3, 2024)

Reports
Earnings & Results·Regulation FD·Exhibits & Filings
Filing Date
Filed June 3, 2024
Period End
June 3, 2024
Security
HON
In the record · 2016–202610-K1110-Q348-K196

HON filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 196 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Feb ’18Feb ’18
  2. Material agreement8-K · Apr ’20Apr ’20
  3. Leadership change8-K · Oct ’22Oct ’22
  4. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed June 3, 2024. Cited figures are marked; the original filing is the authoritative source.

On June 3, 2024, Honeywell (HON) completed its $4.95 billiona acquisition of Carrier's Global Access Solutions business, adding LenelS2, Onity, and Supra.

The deal expands Honeywell's security and building automation offerings with cloud-based software and recurring revenue, and management expects it to be adjusted EPS accretive in the first full year of ownership. The acquired business has about 1,200 employees and forecasted annual sales above $1 billionb when combined with Honeywell's existing security portfolio. Alongside the close, Honeywell raised its full-year 2024 sales guidance to $38.5B-$39.3B, reflecting roughly $0.4B from the acquisition.

Honeywell also changed its non-GAAP definitions, beginning in Q2 2024, to exclude amortization of acquisition-related intangibles and certain acquisition-related costs from segment profit and adjusted EPS. This change lifts the updated adjusted EPS guidance to $10.15c-$10.45, about $0.50 higher, and segment margin guidance to 23.8%-24.1%. Investors should note that the acquisition itself reduces segment margin by about 20 basis points and adjusted EPS by about $0.15, so the headline EPS increase is largely driven by the definition change rather than operating improvement.

For Q2 2024, Honeywell guided sales to $9.3Bd-$9.6B and adjusted EPS to $2.35-$2.45, up 2%-7% year over year. Full-year operating cash flow is expected at $6.7B-$7.1B and free cash flow at $5.6B-$6.0B. Investors should weigh the strategic logic of the deal against the non-GAAP change, which makes year-over-year comparisons depend on the restated historical figures Honeywell plans to publish in July 2024.

02—Key points

Key Highlights

  1. Completed the $4.95 billion acquisition of Carrier's Global Access Solutions business, adding LenelS2, Onity, and Supra, with about 1,200 employees.
  2. Expects the deal to be adjusted EPS accretive in the first full year of ownership, with forecasted annual sales above $1 billion combined with the existing security portfolio.
  3. Raised full-year 2024 sales guidance to $38.5B-$39.3B, including about $0.4B from the acquisition, with organic growth unchanged at 4%-6%.
  4. Changed non-GAAP definitions starting Q2 2024 to exclude acquisition intangible amortization and certain acquisition costs from segment profit and adjusted EPS.
  5. The non-GAAP change adds about $0.50 to 2024 adjusted EPS guidance and about 1.0 percentage point to segment margin, while the acquisition reduces them by about $0.15 and 0.2 points.
  6. Updated 2024 adjusted EPS guidance to $10.15-$10.45 and segment margin guidance to 23.8%-24.1%, with operating cash flow of $6.7B-$7.1B and free cash flow of $5.6B-$6.0B.
  7. Q2 2024 guidance calls for sales of $9.3B-$9.6B and adjusted EPS of $2.35-$2.45, up 2%-7% year over year.

03—Questions

Frequently Asked Questions

  1. What did Honeywell acquire and for how much?

    Honeywell completed the acquisition of Carrier's Global Access Solutions business for $4.95 billion. The business includes LenelS2 (commercial and enterprise access control), Onity (hospitality electronic locks and mobile credentials), and Supra (cloud-based electronic lockboxes and scheduling software).

  2. How does the acquisition affect Honeywell's 2024 guidance?

    The acquisition adds about $0.4B to full-year 2024 sales, lifting the sales range to $38.5B-$39.3B. It reduces segment margin by about 0.2 percentage points and adjusted EPS by about $0.15. Management expects the deal to be adjusted EPS accretive in the first full year of ownership.

  3. What non-GAAP reporting change did Honeywell make and why does it matter?

    Beginning in Q2 2024, Honeywell excludes amortization of acquisition-related intangibles and certain acquisition-related costs, including tax effects, from segment profit and adjusted EPS. Management says this aligns the metric with internal evaluation and eases peer comparison. The change adds about $0.50 to 2024 adjusted EPS guidance and about 1.0 percentage point to segment margin, so headline figures are not directly comparable with prior periods until Honeywell publishes restated historical figures in July 2024.

  4. What is Honeywell's outlook for Q2 2024?

    Q2 2024 sales are expected to be $9.3B-$9.6B, with organic growth of 1%-4%. Segment margin is expected at 22.7%-23.1%, down 40 basis points to flat year over year. Adjusted EPS is expected at $2.35-$2.45, up 2%-7% from the prior year.

  5. What are the full-year 2024 cash flow expectations?

    Honeywell expects operating cash flow of $6.7B-$7.1B and free cash flow of $5.6B-$6.0B for 2024, defined as operating cash flow less about $1.1B of capital expenditures. These figures were unchanged by the acquisition and the non-GAAP change.

04—Continue

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