Honeywell International Inc (NASDAQ:HON) stock fell 0.13% (As on February 7, 11:20:29 AM UTC-4, Source: Google Finance) after the company said that it will split into three independently listed companies, breaking up one of America’s last standing conglomerates just months after activist investor Elliott Management took a $5 billion stake in the industrial giant. The company has forecast downbeat sales and profit for 2025. The company said it will separate its aerospace and automation businesses into separate entities, alongside its previously announced spin-off of the advanced materials unit. The industrial and aerospace giant has been on a deal-making spree under CEO Vimal Kapur, shedding assets that are not focused on the aviation, automation and energy sectors. The company said it intends to complete the separation in the second half of 2026, which would be tax-free to its shareholders.
On the other hand, the organic sales grew 2%, or 6% excluding the impact of the previously announced Bombardier agreement, led by double-digit organic sales growth in defense and space and building solutions. Despite ongoing macroeconomic challenges, Honeywell’s backlog grew 11% to a record $35.3 billion. Operating income increased 10% and operating margin expanded 50 basis points to 17.3%. Segment profit decreased 8% to $2.1 billion and segment margin contracted 350 basis points to 20.9%, or 70 basis points to 23.7% excluding the impact of the Bombardier agreement. Operating cash flow was $2.3 billion, down 23%, and free cash flow was $1.9 billion, down 27%.
HON in the fourth quarter of FY 24 has reported the adjusted earnings per share of $2.47, beating the analysts’ estimates for the adjusted earnings per share of $2.31, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 7 percent to $10.09 billion in the fourth quarter of FY 24, beating the analysts’ estimates for revenue by 2.30%.
It forecast an adjusted profit per share of between $10.10 and $10.50 for 2025, falling short of analysts’ average estimate of $10.93 according to data compiled by LSEG. Its sales expectations of between $39.6 billion and $40.6 billion for the year also fell short of Wall Street expectations of $41.22 billion.
For 2025 the company expects organic sales growth in the range of 2% to 5%. Segment margin is expected to be in the range of 23.2% to 23.6%, with segment margin expansion of 60 to 100 basis points. The company expects operating cash flow of $6.7 billion to $7.1 billion, and free cash flow of $5.4 billion to $5.8 billion.