Honeywell Restructures Segments To Align With Powerful Megatrends, Reaffirms FY23 Outlook

Honeywell International Inc HON disclosed the realignment of its business segments to drive organic sales growth and inorganic capital deployment.

The new segments, effective Q1 FY24, are Aerospace Technologies, Industrial Automation, Building Automation, and Energy and Sustainability Solutions. 

Aerospace Technologies segment includes aerospace products used in commercial and defense aircraft platforms globally. The company stated that Jim Currier will remain President and CEO of this renamed segment.

Industrial Automation segment comprises process industry operations, creating sensor technologies, automating supply chains, and enhancing warehouses. HON appointed Lucian Boldea as president and CEO of the segment, effective January 1, 2024.

Building Automation segment offers hardware, software, sensors, and analytics and is expected to boost footprints in airports, hospitals, education, and data center markets. Billal Hammoud will remain President and CEO of this segment, said the company.

Energy and Sustainability Solutions segment deals with improving the resiliency and efficiency of energy and reducing emissions. HON appointed Ken West as president and CEO of the segment, effective January 1, 2024. 

"After a complete review of our portfolio, we plan to organize our businesses around three powerful megatrends, each of which is underpinned by our robust digitalization capabilities and solutions. This simplified structure will enable Honeywell to realize synergies that will accelerate our innovation playbook, leverage our financial strength, and unlock greater value through our Accelerator operating system," commented Vimal Kapur, CEO. 

Outlook: The company reaffirmed its Q3 guidance for sales at $9.1 billion-$9.3 billion and segment margin at 22.3%-22.6%. On the other hand, HON sees adjusted EPS within or above its guidance range. The company's prior Adjusted EPS stands at $2.15-$2.25 or $2.28-$2.38 excluding pension headwind.

The company expects FY23 results to be within the guidance range for sales at $36.7 billion-$37.3 billion, adjusted EPS at $9.05-$9.25, adjusted EPS excluding pension headwind at $9.60-$9.80 and segment margin at 22.4%-22.6%.

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HON expects to release Q3 FY23 earnings on October 26, 2023.

Price Action: HON shares are trading higher by 0.40% at $187.26 premarket on the last check Tuesday.

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