Honeywell Q3 sales up 9% with continuous robust growth in China
CHARLOTTE, N.C., Oct. 22, 2021 -- Honeywell (NASDAQ: HON) announced outstanding results for the third quarter that met or exceeded the company's guidance. Honeywell sales for the third quarter were up 9% on a reported basis and up 8% on an organic basis. Meanwhile, growth in China continues to be robust, as China's very favorable investment environment provides business opportunities for the company.
"The third quarter was another strong one for Honeywell, with sales growth in all four segments, significant margin expansion, and exceptional execution even as we faced tough challenges in the supply chain environment," said Darius Adamczyk, chairman and chief executive officer of Honeywell. "Organic sales grew 8%, led by 38% growth in Aerospace commercial aftermarket, 21% growth in Safety and Productivity Solutions, and 29% growth in UOP and 14% growth in advanced materials within Performance Materials and Technologies. Our focus on operational and commercial excellence enabled us to expand segment margin by 130 basis points to 21.2%, exceeding the high end of our guidance range by 60 basis points. As a result, we delivered adjusted earnings per share1 of $2.02, up 29% year over year, achieving the high end of our third-quarter guidance range. Our cash performance was strong, and we remain on track to meet our cash flow commitments for the year. We continued to execute on our capital deployment strategy, repurchasing $0.7 billion in shares, announcing our 12th dividend increase in the past 11 years, and completing the acquisition of Performix Inc. to expand our portfolio of automation solutions for the life sciences industry."
"Our growth in China continues to be robust. We were up high single digits in Q3 and we actually don't see that abating," Darius said at the earnings call for the third quarter of 2021. “Honeywell's position in China continues to be very good.” He added that China's current efforts to generate more energy to support the industry in the fourth quarter will create a very favorable investment environment and business opportunities for Honeywell, and he is also very excited about China's focus on sustainability, believing that Honeywell could be a major player in China.
Adamczyk continued, "Our disciplined approach to productivity and pricing helped deliver a strong third quarter despite an uncertain global environment marked by supply chain constraints, increasing raw material inflation, and labor market challenges. We continue to focus on mitigating these challenges in the fourth quarter, while capitalizing on near-term growth opportunities across our portfolio."
Honeywell updated its full-year guidance to reflect the persistent effects of the macro-challenged environment as well as the third-quarter results. Full-year sales are now expected to be in the range of $34.2 billion to $34.6 billion with organic sales growth in the range of 4% to 5% due to supply chain constraints. Segment margin is expected to be in the range of 20.9% to 21.1%. Adjusted earnings per share2 is expected to be $8.00 to $8.10. Operating cash flow is still expected to be in the range of $5.9 billion to $6.2 billion and free cash flow is still expected to be in the range of $5.3 billion to $5.6 billion.