Key facts
- Honeywell Aerospace projects $6.5 billion in adjusted earnings by 2030.
- Growth will be driven by demand from jetmakers and defense customers.
- The company will prioritize investing in capacity and its supply chain.
- Dividends and share buybacks will be de-prioritized.
- The company expects 7% to 9% sales growth this year.
- Honeywell Aerospace's backlog has grown to $19 billion.
Honeywell Aerospace is projecting significant growth following its separation from the parent company, Honeywell International, expected on June 29. The division anticipates achieving $6.5 billion in adjusted earnings by 2030, fueled by strong demand from commercial jet manufacturers and defense sector clients. To achieve this, the company, which will trade as HONA, will prioritize investing in its capacity and supply chain, rather than dividends or share buybacks. CEO Jim Currier stated that this focus will provide a tremendous return on investment capital and drive organic growth. The company expects 7% to 9% sales growth this year, with earnings before interest and taxes between $4.6 billion and $4.7 billion, and free cash flow of $1 billion to $1.5 billion in the second half of the year. Through 2030, sales are expected to grow 6% to 8% annually, with over $4 billion in free cash flow. Honeywell Aerospace's backlog has reached $19 billion, a 20% increase year-over-year. The company plans to invest in its suppliers as well as its own capacity to address potential supply chain bottlenecks. This strategic shift follows a trend of conglomerates breaking up to create leaner, more focused companies, with Honeywell Aerospace aiming to eliminate distractions and leverage synergies within its sector.