Honeywell Aerospace Stock Sinks on Weaker-than-Expected Q2 Results

Honeywell Aerospace's shares plummeted by about 20% after the company reported weaker-than-expected second-quarter results and reduced its full-year guidance. The aerospace and defense supplier, which separated from Honeywell Technologies in June, saw revenue grow 5% to $4.52 billion, but fell short of Wall Street estimates of $4.6 billion.

Operating profit declined 7% year over year due in part to inventory obsolescence charges, resulting in adjusted earnings of $1.87 per share. Despite modest growth, investors reacted negatively to the revised outlook, sending shares sharply lower.

Honeywell Aerospace lowered its full-year organic revenue growth forecast from 7% to 9%, citing a need to align guidance with supply chain capabilities. The company now expects 4% to 5% growth and reduced expected pro forma standalone adjusted EBITDA to between $4.35 billion and $4.45 billion.

Analysts pointed to continued operational issues as a major concern, including supply chain challenges and inventory obsolescence charges. Melius Research analyst Scott Mikus noted that Honeywell Aerospace's core sales growth lagged industry peers in the commercial aftermarket, commercial original equipment, and defense sectors.