Dive Brief:
- Industrial giant Honeywell announced Thursday that it generated $9.7 billion in total sales in the third quarter, a 6% year-over-year increase that fell short of analysts’ expectations.
- The main driver of the sales miss was underperformance by the company’s industrial automation unit, according to CFO Greg Lewis.
- “We navigated through a challenging operational environment in the third quarter, delivering segment margin and adjusted earnings per share above the high-end of our guidance range and 10% increased cash flow, despite coming in below our sales guidance,” Lewis said in a Thursday earnings call.
Dive Insight:
Financial data and software company FactSet’s mean estimate for Honeywell’s Q3 sales was $9.905 billion, based on predictions from 17 analysts, a spokesperson said via email.
“Industrial automation sales were flat sequentially, but decreased 5% organically in the quarter, primarily due to lower volumes in warehouse and workflow solutions and short cycle safety and sensing technologies,” said Lewis, who is transitioning to a new role as senior vice president of Honeywell Accelerator and senior advisor to Honeywell CEO Vimal Kapur.
Lewis is expected to step down from his current role at the beginning of next year and is set to be replaced by Mike Stepniak, who now serves as CFO of Honeywell’s Aerospace Technologies unit.
Honeywell’s weak performance in the area of warehouse automation comes as the overall market has struggled to bounce back from a slowdown that began in 2022.
Warehouse automation revenues are forecast to dip this year to $30.5 billion from $31.4 billion in 2023, according to Interact Analysis data shared with CFO Dive in August.
