Honeywell International (HON) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales reached $9.7B, up 6% year-over-year, with organic sales up 3% amid a challenging environment.

• Adjusted EPS grew 8% to $2.58, surpassing guidance; segment margin was 23.6%, both above the high end of guidance.

• Record backlog at $34B, up 10% year-over-year, supports a constructive outlook for 2025.

• Announced spin-off of Advanced Materials and exit from PPE business, with PPE classified as held for sale and impairment charges recorded.

• CFO transition announced: Mike Stepniak to succeed Greg Lewis in February 2025.

Financial highlights

• Q3 2024 gross margin was 38.5%, up 10 bps year-over-year; segment margin held flat at 23.6%.

• Adjusted EPS was $2.58 (up 8% year-over-year); reported EPS was $2.16 (down 5% year-over-year).

• Free cash flow was $1.7B, up 10% year-over-year; operating cash flow was $2.0B.

• Segment profit increased 6% to $2.3B, led by Aerospace and recent acquisitions.

• Deployed $3.1B in Q3 to M&A, dividends, and capex.

Outlook and guidance

• Full-year 2024 sales guidance revised to $38.6B–$38.8B (3%–4% organic growth).

• Adjusted EPS guidance narrowed to $10.15–$10.25, up 7%–8% year-over-year.

• Segment margin guidance for FY 2024: 23.4%–23.5%, flat to up 10 bps from 2023.

• Free cash flow guidance for 2024: $5.1B–$5.4B.

• Advanced Materials spin-off targeted for completion by late 2025 or early 2026.