Honeywell Inc. (HON) - Get Report posted stronger-than-expected second quarter earnings Friday but noted a significant slump in aerospace sales linked to Boeing's 737 MAX delays and weak demand for commercial aircraft.
Honeywell said adjusted earnings for the three months ending in June were pegged at $1.26 per share, down 40% from the same period last year but 5 cents ahead of the Street consensus forecast. Group revenues, Honeywell said, fell 19.1% to $7.477 billion, just ahead of analysts' estimates.
Aerospace sales slumped 27.5% to $2.54 billion, Honeywell said, due to lower commercial aircraft demand amid the peak of travel restrictions during the coronavirus pandemic and the broader impact of the delayed return to service of Boeing Co.'s (BA) - Get Report 737 MAX. The group added that third quarter aerospace sales are likely to fall by 25% when compared to last year.
"The second quarter was a challenging one, but we executed on the three things that will enable us to weather this downturn: aggressively managing cost, driving sales growth where demand is strong, and investing in exciting new technologies that, through careful attention to customer and end-user needs, will help keep people safe when they get back to the workplace, back to play, back to travel, and back to life," said CEO Darius Adamczyk.
"Our focus on sales, cost, and optimizing working capital, combined with our diverse portfolio and strong balance sheet, will enable Honeywell to adapt to and execute through the downturn. I am confident we will emerge well-positioned for the economic recovery to come.
Shares of Honeywell shares were down 2.22% at $150.32 in trading on Friday. The stock is down approximately 14% year to date.