Honeywell Aerospace Plunges 13% After Q2 Miss and Guidance Slashed
HON sits 27% above its 52-week low of $195.769.
Summary
Honeywell Aerospace's first standalone quarter was a mess. Q2 sales of $4.5B missed the $4.6B consensus, and operating profit of $1B fell short of the $1.1B estimate, down 7% year over year partly due to inventory obsolescence charges. Worse, management slashed full-year guidance: sales growth now seen at 4-5%, down from 7-9%, and operating profit guided to $4.4B, well below the prior $4.7B and the Street's $4.6B. The stock dropped 13% premarket. This follows the June spin-off from Honeywell Technologies and confirms the supply chain and execution issues flagged by analysts, with commercial aftermarket growth of just 8% versus peers' 23%. The $2B-plus overdue backlog continues to grow, risking future high-margin aftermarket revenue. The next catalyst will be any operational update or the Q3 report to see if management can begin closing the gap with peers.
At the time of this announcement, HON was trading at $248.92 on NASDAQ in the Industrial Applications And Services sector, with a market capitalization of approximately $78.6B. The 52-week trading range was $195.77 to $260.15. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Dow Jones Newswires.