Honeywell (HON) Tops Q4 EPS by 7c, Revenues Beat; Offers FY21 EPS/Revenue Guidance

Honeywell (NYSE: HON) reported Q4 EPS of $2.07, $0.07 better than the analyst estimate of $2.00. Revenue for the quarter came in at $8.9 billion versus the consensus estimate of $8.4 billion.

• Reported Fourth Quarter Earnings Per Share of $1.91 and Adjusted EPS¹ of $2.07, Above High End of Guidance
• Delivered Fourth Quarter Operating Cash Flow of $2.8 Billion, Conversion of 205%, and Free Cash Flow of $2.5 Billion, Adjusted Conversion² of 170%
• Completed Three M&A Deals Aligned to Key Growth Vectors and Announced Agreement to Acquire Sparta Systems for $1.3 Billion
• Expect 2021 Earnings Per Share of $7.60 - $8.00, Up 13% - 19%, 7% - 13% Adjusted³

"We finished a challenging 2020 with another quarter of sequential improvements in sales growth, margin expansion, and adjusted earnings per share," said Darius Adamczyk, chairman and chief executive officer of Honeywell. "Our focus on delivering differentiated solutions drove double-digit organic sales growth in our defense and space, warehouse automation, personal protective equipment, and recurring connected software businesses for the second consecutive quarter. We continued to prudently reduce costs in the quarter, bringing our full-year total fixed cost savings to $1.5 billion. Our fourth quarter adjusted earnings per share was $2.07, flat year-over-year on an adjusted basis1 and above the high end of our guidance. We also continued our focus on generating cash and achieved 170% adjusted free cash flow conversion2 in the quarter. For the year, we generated $6.2 billion in operating cash flow with 130% conversion and $5.3 billion in free cash flow with 105% adjusted free cash flow conversion5.

"Honeywell's strong balance sheet put us in a good position to weather the challenges of 2020 while investing for future growth. We invested in high-return capital expenditures, repurchased $3.7 billion of Honeywell shares, completed three acquisitions, made six new investments within Honeywell Ventures, and announced our 11th consecutive dividend increase. Even with this level of cash deployment, we ended 2020 with $15.2 billion of cash and short-term investments on hand," Adamczyk said.

Adamczyk concluded, "I am very proud of the way Honeywell responded to the crisis in 2020. We quickly focused on liquidity, cost management, and execution, while rapidly innovating and ramping up production of a wide array of offerings to help the world recover, including critical personal protective equipment. We also remained focused on growth and investing in new markets and technologies. We entered 2021 with positive momentum following two quarters of sequential improvement. I am confident we are well-positioned for the economic recovery and will continue to perform for our shareowners, our customers, and our employees in the short and long term."

GUIDANCE:

Honeywell sees FY2021 EPS of $7.60-$8.00, versus the consensus of $7.87. Honeywell sees FY2021 revenue of $33.4-34.4 billion, versus the consensus of $33.95 billion.

For earnings history and earnings-related data on Honeywell (HON) click here.

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