Honeywell(US:HON)2024-06-03 11:07Acquisition and Strategic Focus - Honeywell completed the acquisition of Carrier Global Corporation's Global Access Solutions business for $4.95 billion, enhancing its position in security solutions [2]. - The acquisition aligns with Honeywell's strategic focus on automation and digitalization, positioning it as a leader in security solutions [4]. - Approximately 1,200 employees from Global Access Solutions have joined Honeywell, enhancing its operational capabilities [3]. Financial Guidance and Performance - Honeywell's updated full-year sales guidance is now $38.5 billion to $39.3 billion, reflecting organic sales growth of 4% to 6% [5]. - Adjusted earnings per share are expected to range from $10.15 to $10.45, indicating a growth of 7% to 10% compared to the previous year [5]. - For the three months ended June 30, 2023, diluted earnings per share was $2.22, with an expected range of $2.21 to $2.31 for the same period in 2024 [33]. - Adjusted earnings per share for the twelve months ended December 31, 2023, is projected to be between $9.65 and $9.95, compared to $9.16 for the previous year [33]. - Free cash flow for the twelve months ending December 31, 2024, is expected to be approximately $5.6 to $6.0 billion, with cash provided by operating activities estimated at $6.7 to $7.1 billion [40]. Segment Performance - Segment margin is projected to be between 23.8% and 24.1%, with an expansion of 30 to 60 basis points [5]. - Second-quarter sales are anticipated to be between $9.3 billion and $9.6 billion, with organic sales growth of 1% to 4% [5]. - Segment margin for the second quarter is expected to be 22.7% to 23.1%, reflecting a decrease of 40 basis points to flat compared to the prior year [5]. Amortization and Adjustments - Honeywell will exclude amortization expense for acquisition-related intangible assets from segment profit and adjusted earnings per share starting in Q2 2024 [5]. - The company will exclude acquisition amortization and related costs from adjusted earnings per share starting in the second quarter of 2024 [32]. - Acquisition-related intangibles amortization for the three months ended June 30, 2024, is expected to be approximately $66 million, increasing from $48 million in the same period of 2023 [39]. - The company anticipates an adjustment of approximately $24 million for acquisition-related costs in the three months ended June 30, 2024, compared to $1 million in the same period of 2023 [39]. Other Financial Adjustments - The pension mark-to-market expense for the twelve months ended December 31, 2023, is estimated at $0.19 per share, with no forecast available for future periods [33]. - The company has changed its valuation methodology for legacy Bendix liabilities, resulting in a $434 million pre-tax adjustment for the twelve months ended December 31, 2023 [39]. - The expected adjustment related to Russian-related charges for the twelve months ended December 31, 2024, is projected to be $17 million [35]. Cash Flow Insights - The company believes that free cash flow is a useful measure for evaluating cash generated by operations for future investments, debt repayment, and dividends [41].