Honeywell Revenue Hurt by Drop in Industrial Automation Sales

Honeywell International (HON) shares declined Thursday after the aviation and safety equipment manufacturer missed sales estimates and lowered its revenue guidance as demand for its industrial automation products slumped. 

Honeywell reported third-quarter revenue rose almost 6% year-over-year to $9.73 billion, while analysts surveyed by Visible Alpha were looking for $9.89 billion. Adjusted earnings per share (EPS) of $2.58 exceeded forecasts.

Sales at its Industrial Automation segment declined 5% to $2.50 billion, which the company blamed on “volume softness in warehouse and workflow solutions and safety and sensing technologies.”

Sales got a big boost from Honeywell’s Aerospace Technology sector, rising 12% to $3.91 billion, led by its defense and space offerings. Sales at its smaller Building Automation and Energy and Sustainability Solutions units were higher by 14% and 1%, respectively.

CEO Says Honeywell ‘Executed Through a Challenging Environment’

Chief Executive Officer (CEO) Vimal Kapur said that the company “executed through a challenging environment in the third quarter.” Kapur added that it made significant progress this year “on the simplification and optimization of the Honeywell portfolio,” which included the planned spinning off of its Advanced Materials division and the exiting of its personal protective equipment (PPE) business, as well closing on four acquisitions.

The company explained that because of the closings of those purchases, along with third quarter-results and management’s outlook for the rest of the year, it was lowering its 2024 sales forecast to a range of $38.6 billion to $3.88 billion from the earlier prediction $39.1 billion to $39.7 billion. It narrowed the range of adjusted EPS to $10.15 to $10.25 from $10.05 to $10.25. 

With today’s nearly 5% drop, shares of Honeywell International now are little changed year-to-date.