The News: Honeywell’s third quarter (Q3) revenue increased by 3% to $9.21 billion, up from $8.95 billion year-over-year (YoY) as the controls and automation company released its latest earnings results. The Q3 revenue figure just missed analyst estimates of $9.23 billion as the company continues to execute on its business plans in a still challenging global macroeconomic environment. See the full Q3 2023 earnings press release on the Honeywell Investor webpage.
Honeywell Q3 Revenue Hits $9.21 Billion, Up 3% Year-Over-Year
Analyst Take: Honeywell’s Q3 revenue of $9.21 billion, a 3% rise from a year ago, shows the progress and challenges for Honeywell and other tech companies even as a recovery continues worldwide from the COVID-19 pandemic, the war in Ukraine, and other global issues. We remain optimistic and are pleased to see this continuing sales growth from Honeywell, which has been working to make needed adjustments in its operations and strategy to counter any economic headwinds that come its way. We see successes in that strategy and have been watching with interest as Honeywell continues to maintain a steady release schedule for new products and services to help its enterprise customers stay ahead of their competitors.
Honeywell’s revenue and other earnings results for Q3 2023 by the numbers:
- Q3 2023 revenue of $9.21 billion, up 3% from $8.95 billion YoY, just missing analyst consensus estimates of $9.23 billion for the quarter from analysts at Investing.com.
- Q3 2023 diluted earnings per share (EPS) of $2.27, up from $2.25 per share YoY. The EPS beat analyst consensus estimates of $2.23 per share from Investing.com.
- Q3 2023 net income totaled $1.52 billion, down 2% from $1.55 billion YoY.
- Q3 2023 operating income of $1.93 billion, up 11% from $1.74 billion YoY.
- Q3 2023 operating income margin of 20.9%, compared with 19.5% YoY.
For Honeywell, we believe that its broad diversification is helping the company do well even when some of its business segments see individual challenges. Honeywell products cover so much of the marketplace, from building and industrial controls and automation to performance materials, aerospace, defense, safety and productivity products, and more. We see this diversification reflecting the wisdom of Honeywell’s leadership in assembling a well-rounded product and services mix to fight economic challenges when they arise.
We have said before that this steadiness bodes well for Honeywell, especially when there is global uncertainty about war, economic issues, and other concerns, and we believe that this approach continues to be a positive stance into the future for this innovative technology vendor.
Honeywell Q3 Revenue by Business Segments
Honeywell’s Q3 revenue, by business unit, breaks down as follows.
Q3 revenue for the Aerospace division rose to $3.5 billion, up 18% from $3 billion YoY, while the Honeywell Building Technologies unit brought in $1.53 billion in revenue, which is flat YoY. The Performance Materials and Technologies unit saw revenue increase by 5% to $2.876 billion, up from $2.72 billion YoY. The Honeywell Safety and Productivity Solutions unit saw revenue fall by 24% to $1.31 billion, down from $1.73 billion YoY, due to lower sales volumes in warehouse and workflow products and services. Demand in the segment was also affected by softness in the warehouse automation market, according to Honeywell. On the positive side, Honeywell’s order backlog increased to a record $31.4 billion, which is up 8% YoY.
Honeywell Guidance for Full Year 2023 Earnings
Honeywell also announced its earnings guidance for the full year of 2023, including expected total revenue of between $36.8 billion and $37.1 billion, which is up from $36.7 billion at the bottom and down slightly from $37.3 billion at the top compared with earlier guidance. Also expected are adjusted EPS growth of $9.10 to $9.20, which is up from previous guidance of $9.05 at the bottom and down from $9.25 per share at the top of the previous range. The company also said it expects operating cash flow of $4.9 billion to $5.3 billion, unchanged from previous guidance, and free cash flow (FCF) of $3.9 billion to $4.3 billion, also unchanged from previous guidance.
What It Means: Honeywell Q3 Revenue Overview
As we review Honeywell’s Q3 revenue and other earnings results, we see that it was a good quarter overall for the company, showing healthy results for what continues to be a growth-focused technology powerhouse. Strikingly, the Q3 results come just 4 months after Honeywell got a new CEO, Vimal Kapur, the company’s former president and COO, who was appointed on June 1. Kapur was named to his post after the previous CEO, Darius Adamczyk, stepped down to become the company’s Executive Chairman.
In our view, Kapur has taken over the helm of Honeywell smoothly due to the familiarity of his tenure at the company and is ably showing his cordial personality and smart decision-making, assisted by his creative, and forward-looking executive team.
As Honeywell heads into Q4, we will continue to watch with interest as Honeywell’s innovations and market leadership continue to drive growth as the company meets the needs of its global customers. We expect to see lots of continuing progress within this important enterprise technology partner in the future.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
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Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
