Honeywell recently reported results for the second quarter of 2023 that met or exceeded the company’s guidance. The company also raised its guidance range for full-year endogenous growth, segment margins and adjusted earnings per share.

Honeywell’s second quarter sales were $9.1 billion, up 2% year-over-year, and organic sales were up 3% year-over-year, with double-digit growth in commercial aviation, process control, and UOP organic sales. Operating margin increased 270 basis points to 20.6 percent and segment margin increased 150 basis points to 22.4 percent, with growth in the Safety & Productivity Solutions Group, Smart Building Technologies Group and Aerospace Group businesses. Second-quarter earnings per share were $2.22, up 21% from a year ago, and adjusted earnings per share were $2.23, up 6% from a year ago. Thanks to the strong net income performance and improved working capital, operating cash flow reached $1.4 billion and free cash flow reached $1.1 billion.

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“Honeywell had an excellent second quarter, meeting or exceeding expectations on all metrics.” Vimal Kapur, President and CEO of Honeywell, said, “Organic sales growth was supported by double-digit growth in commercial aviation, process control and UOP. The commercial aviation business achieved double-digit growth for the ninth consecutive quarter, and the overall strength of the aerospace business continues to support Honeywell’s short – and long-term growth prospects. The company’s order backlog remained at record levels, reaching $30.5 billion at the end of the second quarter, up 4% from a year earlier. Our continued focus on operational excellence allowed us to comfortably handle inflation and exceed the upper end of our margin guidance range, resulting in a 6% year-over-year increase in adjusted earnings per share to $2.23. Our strong balance sheet allowed us to execute our capital deployment strategy and make important updates to our business portfolio, deploying $2.1 billion in dividends, mergers and acquisitions, share repurchases and high-return capital expenditures during the quarter. We have followed a robust M&A strategy and invested in a number of new technologies and adjacency businesses, including the acquisition of US Compressor Controls for approximately $700 million.”

He added: “In a challenging macro environment, the Honeywell Accelerator operating system continues to enable us to drive superior performance and maximize shareholder value. This operating system, coupled with continued growth in our key end markets and a differentiated portfolio of technology solutions, has enabled us to increase our guidance range for the full year 2023.”

Based on the company’s second quarter results and management’s outlook for the second half of the year, Honeywell is raising its guidance range for full-year sales, segment margins and adjusted earnings per share. Full-year sales are expected to be in the range of $36.7 billion to $37.3 billion, with organic sales growth expected to be 4% to 6%.

Segment margins are expected to increase 70 to 90 basis points to 22.4 to 22.6 percent. Adjusted earnings per share are expected to be $9.05 to $9.25, up 5 cents from the lower end of the previous guidance range. Cash flow from operations is still expected to be between $4.9 billion and $5.3 billion. Free cash flow is still expected to be between $3.9 billion and $4.3 billion.