The company's global footprint is publicly displayed in the hundreds of products and services that it creates. A list of their products includes the air traffic communications systems brake pad, boilers for commercial use, flat panels industry pigments, planarization material and thermocouples, silicone sealants, and water mixing valves. Honeywell is an absolute conglomerate in an era of ever-increasing specification. Honeywell's range of operations spans from the most common civilian items (thermostats found in every house) to the highest sophisticated military equipment like helicopter engines.

Honeywell's Business Segments

Honeywell might not be more than a moderate to a medium-sized business if it weren't for humans' natural urge to protect themselves from danger. Honeywell is a massive military contractor and a significant equipment provider to the United States Armed Forces. In addition, the company has considerable assets in Poland, Germany, and several other nations.

Although Honeywell may have got its beginnings in the past century when it was making products for heating, Honeywell's aerospace activities have expanded to the point that they've been transformed into an independent reporting section. It's Honeywell's biggest. Aerospace is responsible for 35% of its revenues.

Honeywell also has three additional important report segments that include technology for building Performance technologies and materials and products and safety solutions. The first includes nearly everything that makes modern living pleasant and comfortable. Our grandparents lived with four walls, a roof, and perhaps a chimney. The accessories that are a standard of modern life--heating, cooling, humidifying, and airflow-- are largely the product of Honeywell and its rivals.

Honeywell's Financials

Honeywell is a giant company that undertakes projects requiring massive capital and labor expenditures. Refineries for oil in India and LA wastewater treatment -- there's a reason Honeywell employs more than 19,000 scientists and engineers, who make up a tiny fraction of a workforce that's global in number is approximately 110,000 across the globe.

However, there are some caveats. It's generally been a good time for Honeywell over the past decade and, in turn, for its investors. Honeywell reported a net profit of $4.87 billion that ended December 31, 2020. It was down around 22% from the prior year, which reported an income of $6.23 billion.

Honeywell announced that the global recession caused by the COVID-19 pandemic led to a dramatic reduction in their aerospace revenues for 2020. The adverse impact on global travel resulted in lower demand for Honeywell's products from manufacturers of the original equipment and lower profits for their commercial businesses in the aftermarket. Sales and profits also decreased for the company's performance segment, which includes building technology and materials.

However, the productivity and safety solutions section saw impressive revenue and profits growth during the year, as demand grew for Personal Protective Equipment for Respiratory Diseases and warehouse automation solutions. As of December 31, 2020, the company reported a strong backlog of orders totaling $26.4 billion for its productivity and safety solutions.

In 2020, Honeywell's management implemented various strategies to combat the global recession and slow demand for their goods. Honeywell instituted cost-cutting programs that included the elimination of merit-based increases as well as permanent reductions to its workforce. Additionally, in addition to having $15.2 billion in money and equivalents, the company also secured additional liquidity via deferred draw term loan agreements and public senior note offering.

Honeywell's Recent Developments

Honeywell had a market cap of around $160.5 billion on April 19, 2021. If a company grows to that size as Honeywell and maintains this level for many years and years, acquisitions are a necessary aspect of a business. While Honeywell did not announce any significant divestitures for 2021, the company did purchase numerous businesses for an overall value of around $ 261 million (net of debt and cash assumed).

For its building technologies division, Honeywell completed the acquisition of the Sine Group in December of 2020. Sine Group is a SaaS firm that provides solutions for the supply chain management. In 2020, Honeywell announced that it had agreed to buy Sparta Systems via New Mountain Capital. Sparta Systems is a supplier of enterprise management software to the health sciences industry. The total value of the all-cash transaction is $1.3 billion. The deal is expected to be finalized in 2021 and will be recorded under the technology and performance part of the company's financial statements.

Conclusion

Innovation isn't a mere buzzword and isn't enough for a huge corporation to thrive into the twenty-first century. In the 80s, it wouldn't have been difficult to imagine a company based in New Jersey of medical scanners and the metallic film the pills are made of in tackling massive emission control projects worth millions of dollars in China. But, to allow Honeywell to maintain its position in a field with huge obstacles, it must constantly evolve, change and expand into areas with the highest potential for future earnings.