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Honeywell Has Record Revenues for Third Quarters

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Honeywell’s Q3 2018 revenue

In Q3 2018, Honeywell International (HON) reported revenue of $10.76 billion, an increase of 6.3% YOY (year-over-year). It beat Wall Street’s expectation of $10.75 billion and marked its highest third-quarter revenue ever. Since 2013, Honeywell’s Q3 revenue has grown at a compound annual rate of 2.2%.

HON’s services revenue continued to increase in the double digits. It grew 10.4%, while product sales rose 5.3%. On an organic basis, which excludes the foreign currency impact, revenue grew 7% in the third quarter. Its revenue increased on robust new orders, which helped build backlogs and the execution of backlogs. Higher volumes in Aerospace, continued demand for the Solstice low global warming products, and short cycle execution of process solutions software and services drove up revenues.

All of HON’s reporting segments witnessed growth. Safety and Productivity Solutions grew 12%, Aerospace increased 10%, and Home and Building Technologies grew 3%, while Performance Materials and Technologies grew 4%. We’ll look at each of these segments’ performances later in this series.

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Management comments

Darius Adamczyk, Honeywell’s chair and CEO, said, “Honeywell continued to build on its strong first-half performance, delivering exceptional results across the board. Organic sales were up 7 percent driven by continued double-digit growth in our warehouse automation business; strong growth across the Aerospace business; demand for Solstice low global-warming materials and short-cycle Process Solutions software and services; and continued momentum in Homes and ADI global distribution.”

Revenue guidance

With its continued strong revenue growth, the spin-off of Garrett Motion (GTX), and the upcoming spin-off of Resideo, Honeywell now expects its fiscal 2018 revenue guidance to be $41.7 billion–$41.8 billion.

Investors seeking indirect exposure to Honeywell could consider the Industrial Select Sector SPDR ETF (XLI), which has invested 5.2% of its portfolio in Honeywell. The fund also provides 8.7%, 5.4%, and 5% exposure to Boeing (BA), 3M (MMM), and General Electric (GE), respectively.

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