Honeywell Technologies (HON)’s First Earnings as a Standalone Company: Bull vs Bear Analysis

What Happened and Why the Numbers Are a Bit Messy?

Since the aerospace spinoff lone finished close astatine the extremity of the quarter, this study inactive includes immoderate of Honeywell Aerospace's results mixed in, which makes consecutive comparisons tricky. Total revenue, including that leftover aerospace piece, came successful astatine $9.72 billion, up 4% from a twelvemonth agone and beating the astir $9.5 cardinal analysts expected. Strip aerospace backmost out, and gross for conscionable the automation concern was $5.19 billion, up 3%, beating the $5.02 cardinal Wall Street had modeled specifically for the smaller, standalone company.

On profit, adjusted net per share, including the leftover aerospace results came successful astatine $4.52, really down 4% from $4.72 a twelvemonth earlier. On a standalone ground without aerospace, adjusted net were $1.95 a share, up 10% from $1.77 a twelvemonth agone and beating the $1.82 analysts expected for the new, smaller Honeywell Technologies. There was besides a one-time boost: nett net nether modular accounting rules deed $5.68 billion, mostly due to the fact that of a $6.63 cardinal one-time accounting summation tied to deconsolidating Quantinuum, Honeywell's quantum computing venture, a abstracted transaction from the aerospace spin-off, not from the existent operating concern doing better.

That raises a existent question. Is this a genuinely beardown archetypal 4th arsenic a standalone firm, oregon does the messy, one-time quality of a spinoff 4th marque it hard to archer what Honeywell Technologies (NASDAQ:HON) really looks similar going forward?

The Bull Case

All 3 of Honeywell's remaining automation segments grew organically, and orders for the standalone concern wide grew 16%, with backlog reaching astir $20 billion. Building Automation was the standout, with integrated income up 9% and orders up 13%, driven by beardown request from information centers and hotels. Industrial Automation grew income 4% organically connected beardown request for sensing and measurement equipment. Process Automation, the 1 conception with income down somewhat this quarter, really saw orders surge 24%, with Middle East orders unsocial up much than 50% connected refurbishment projects, and absorption expects a "sharp inflection" successful that segment's maturation starting successful the 3rd quarter. Kapur said the results bespeak a "year-plus agelong process to simplify our business," and that the benefits are already showing up.