Honeywell International Inc. stock research
FY2024 Q2
Honeywell International (HON) Gross Margin — Quarter Ended Jun 30, 2024
Revenue increased and cost of revenue also rose, resulting in a gross profit that was slightly lower than the prior year but higher than the prior quarter. The gross margin weakened sequentially and year-over-year, as the growth in cost of revenue outpaced the growth in revenue relative to the previous periods.
Gross margin takeaway
Quarter ended Jun 30, 2024 · FY2024 Q2
Revenue increased and cost of revenue also rose, resulting in a gross profit that was slightly lower than the prior year but higher than the prior quarter. The gross margin weakened sequentially and year-over-year, as the growth in cost of revenue outpaced the growth in revenue relative to the previous periods.
- The strongest observable driver of gross margin this quarter is the relative movement between revenue and cost of revenue. Revenue increased compared to both prior periods, but cost of revenue rose at a faster rate, compressing the margin.
- Compared to the preceding quarter, gross margin weakened as revenue and cost of revenue both increased, but cost of revenue grew disproportionately. Versus the same quarter one year earlier, the gross margin also weakened, as revenue was higher but gross profit was slightly lower, indicating that cost of revenue increased more than revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
31.8%
Gross profit
$3.4B
Revenue
$10.5B
Cost of revenue
$5.9B
Quarter-over-quarter change
-7.7 pts
Year-over-year change
-6.6 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Sep 30, 2023 | $9.2B | $3.5B | $5.7B | 38.4% |
| Dec 31, 2023 | $5.8B | $1.9B | $3.8B | 33.6% |
| Mar 31, 2024 | $8.2B | $3.2B | $5.6B | 39.5% |
| Jun 30, 2024 | $10.5B | $3.4B | $5.9B | 31.8% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Mar 31, 2024
-7.7 pts
Year-over-year change
Jun 30, 2023
-6.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable driver of gross margin this quarter is the relative movement between revenue and cost of revenue. Revenue increased compared to both prior periods, but cost of revenue rose at a faster rate, compressing the margin.
Compared to the preceding quarter, gross margin weakened as revenue and cost of revenue both increased, but cost of revenue grew disproportionately. Versus the same quarter one year earlier, the gross margin also weakened, as revenue was higher but gross profit was slightly lower, indicating that cost of revenue increased more than revenue.
Monitor the rate of change in cost of revenue relative to revenue in future periods, as this relationship is the primary factor affecting gross margin direction.