Honeywell(US:HON)2025-10-23 10:05Financial Performance - Third-quarter sales reached $10.4 billion, reflecting a 7% year-over-year increase and 6% organic sales growth, exceeding the high end of previous guidance [4] - Earnings per share for the third quarter was $2.86, a 32% increase year-over-year, while adjusted earnings per share was $2.82, up 9% year-over-year [4] - Honeywell reported net sales of $10,408 million for the three months ended September 30, 2025, an increase of 7% compared to $9,728 million in the same period of 2024 [24] - The company's net income attributable to Honeywell for the three months ended September 30, 2025, was $1,825 million, up from $1,413 million in the same period of 2024, representing a 29% increase [24] - Honeywell's adjusted earnings per share for the nine months ended September 30, 2025, was $7.57, compared to $6.79 for the same period in 2024, marking an increase of 11.5% [24] - Segment profit for Honeywell in Q3 2025 was $2,407 million, compared to $2,296 million in Q3 2024, indicating a 4.8% increase [46] - For the three months ended September 30, 2025, diluted earnings per share increased to $2.86 from $2.16 in 2024, representing a growth of 32.3% [54] Sales and Growth - Total backlog reached a record high, with orders increasing by 22%, driven by strong performance in Aerospace Technologies and Energy and Sustainability Solutions [4] - Aerospace Technologies sales grew 12% organically year-over-year, with commercial aftermarket sales increasing by 19% [8] - Building Automation sales increased 7% organically, supported by growth in North America and the Middle East [9] - Energy and Sustainability Solutions sales decreased 2% year-over-year on an organic basis, with advanced materials growing 5% [9] - Aerospace Technologies segment net sales increased to $4,511 million in Q3 2025, compared to $3,912 million in Q3 2024, reflecting a growth of 15% [26] - Reported sales percent change for Honeywell in Q3 2025 was 7%, with organic sales percent change at 6% after adjusting for foreign currency translation [41] - Aerospace Technologies reported a sales percent change of 15% in Q3 2025, with an organic sales percent change of 12% [41] - Industrial Automation experienced a reported sales percent change of (9)% in Q3 2025, with an organic sales percent change of 1% [41] Financial Guidance and Projections - Full-year sales guidance has been raised to $40.7 billion to $40.9 billion, with organic sales growth expected to be approximately 6% [5] - Segment margin is projected to be in the range of 22.9% to 23.0%, with an expected year-over-year expansion of 30 to 40 basis points [5] - Operating cash flow for the year is now expected to be between $6.4 billion and $6.8 billion, while free cash flow is projected to be between $5.2 billion and $5.6 billion [5] - The expected cash provided by operating activities for the twelve months ended December 31, 2025, is projected to be between $6.4 billion and $6.8 billion, excluding the impact of the Solstice spin-off [65] - The anticipated capital expenditures for the twelve months ended December 31, 2025, are approximately $1.3 billion [65] - Adjusted earnings per share for the twelve months ended December 31, 2025, is expected to be in the range of $10.60 to $10.91, compared to $9.89 for the twelve months ended December 31, 2024, indicating a projected increase of 7.2% to 10.2% [54] Cash Flow and Investments - Operating cash flow for the nine months ended September 30, 2025, was $5,204 million, compared to $3,816 million for the same period in 2024, reflecting a 36% increase [34] - Cash provided by operating activities for the three months ended September 30, 2025, was $3.288 billion, up from $1.997 billion in 2024, reflecting a growth of 64.5% [61] - Free cash flow for the three months ended September 30, 2025, was $1.450 billion, compared to $1.718 billion in 2024, showing a decrease of 15.6% [61] - Net cash used for investing activities in Q3 2025 was $(488) million, a significant decrease from $(2,797) million in Q3 2024 [34] - Honeywell's capital expenditures for the nine months ended September 30, 2025, totaled $(928) million, compared to $(771) million for the same period in 2024, reflecting a 20% increase [34] Strategic Initiatives - The company is progressing with its separation into three publicly-listed entities, with the spin-off of Solstice Advanced Materials set for October 30, 2025 [6] - The company plans to spin off its Advanced Materials business into a standalone entity, Solstice Advanced Materials, which is expected to be publicly traded [20] - Honeywell is evaluating strategic alternatives for its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses, indicating potential market expansion strategies [20] Research and Development - Research and development expenses for the three months ended September 30, 2025, were $497 million, up from $368 million in the same period of 2024, representing a 35% increase [24] Assets and Liabilities - Honeywell's total assets increased to $80,917 million as of September 30, 2025, compared to $75,196 million at the end of 2024, reflecting a growth of 7.2% [32] Adjustments and Other Financial Metrics - The adjustment for divestiture-related costs for the three months ended September 30, 2025, was $382 million, net of tax expense of $115 million [56] - The expected adjustment for acquisition-related intangibles amortization for the twelve months ended December 31, 2025, is approximately $460 million, net of tax benefit of approximately $110 million [56] - The gain related to the Resideo indemnification and reimbursement agreement termination for the three months ended September 30, 2025, was $802 million [56] - The adjustment for loss on expected settlement of divestiture of asbestos liabilities for the three months ended September 30, 2025, was $112 million, net of tax benefit of $36 million [56]