Honeywell Q2 Earnings & Revenues Top Estimates, Down Y/Y

Honeywell International Inc. (HON - Free Report) has reported better-than-expected results in second-quarter 2020, wherein both earnings and revenues surpassed estimates.

Earnings & Revenues

Adjusted earnings were $1.26 per share, surpassing the Zacks Consensus Estimate of $1.15. However, the bottom line declined 40% year over year on account of lower sales.

Honeywell’s second-quarter revenues were $7,477 million, beating the consensus estimate of $7,237 million. The top line recorded a decline of 19% on a year-over-year basis. Notably, the fall was primarily attributable to an 18% decline in organic revenues on account of weakness in end markets due to the coronavirus outbreak-led issues and oil price volatility.

Honeywell International Inc. Price, Consensus and EPS Surprise

Honeywell International Inc. Price, Consensus and EPS Surprise

 

Honeywell International Inc. price-consensus-eps-surprise-chart | Honeywell International Inc. Quote

Segmental Breakup

Aerospace’s revenues were $2,543 million, down 28% year over year. Honeywell Building Technologies’ revenues declined 19% to $1,177 million. Performance Materials and Technologies generated $2,218 million revenues, down 19%, while that for Safety and Productivity Solutions declined 1% to $1,539 million.

 

Costs/Margins

The company’s total cost of sales for the reported quarter was $5,276 million, down 13.4% year over year. Selling, general and administrative expenses declined 14.7% to $1,183 million. Interest expenses and other financial charges were $90 million compared with $85 million a year ago.

Operating income margin in the second quarter was 13.6%, down 550 basis points year over year.

Balance Sheet/Cash Flow

Exiting the second quarter of 2020, Honeywell had cash and cash equivalents of $13,778 million compared with $9,067 million as of Dec 31, 2019. Long-term debt was $17,591 million, higher than $11,110 million recorded at the end of 2019.

During the first six months of 2020, the company generated $2,419 million in cash from operating activities compared with $2,812 million generated in the year-ago comparable period. Capital expenditure was $366 million compared with $312 million incurred in the year-ago comparable period.

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