Honeywell Forecasts Weaker Q2 Amid Middle East Tensions Impacting Supply Chains
Honeywell anticipates Q2 revenues between $9.4 billion and $9.6 billion, falling short of Wall Street's $9.73 billion consensus. The ongoing geopolitical conflict has disrupted supply chains, impacting industrial activity and resulting in a 5.6% drop in pre-market share price.
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Honeywell's adjusted earnings surpassed expectations, with adjusted earnings per share increasing by 11% to $2.45, despite a 43.3% decline in net income to $821 million. The company reported a significant 71% drop in free cash flow to $56 million due to restructuring costs.
Supply chain disruptions linked to Middle East tensions have affected its Process Automation and Technology division, resulting in delayed shipments and increased input costs. Honeywell plans to spin off its Aerospace division by June 29, and has accelerated asset divestitures, including the sale of its Productivity Solutions and Services unit for $1.4 billion. It maintains annual revenue projections between $38.8 billion and $39.8 billion, indicating a focus on growth despite geopolitical risks.
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