Honeywell International Inc. (NASDAQ:HON)

Reported net income attributable to Honeywell fluctuated over the five-year period, beginning at US$5,542 million in 2021, decreasing to US$4,966 million in 2022, and then increasing to US$5,658 million in 2023 and US$5,705 million in 2024. A decrease is then observed in 2025, with reported net income falling to US$4,729 million.

Adjusted net income attributable to Honeywell mirrors the trend of reported net income, exhibiting similar fluctuations. It started at US$5,539 million in 2021, declined to US$4,958 million in 2022, rose to US$5,663 million in 2023 and US$5,706 million in 2024, and subsequently decreased to US$4,735 million in 2025.

Relationship between Reported and Adjusted Net Income

The difference between reported and adjusted net income remains consistently minimal throughout the observed period. The adjustments made to net income are consistently less than US$10 million annually. This suggests that the mark-to-market adjustments for available-for-sale securities have a limited impact on the overall reported profitability of the entity.

Trend Analysis

Both reported and adjusted net income demonstrate a peak in 2024, followed by a decline in 2025. The decrease in 2025 represents a roughly 17.5% reduction from the 2024 peak for both reported and adjusted figures. The initial decline from 2021 to 2022 is approximately 10.2% for both metrics.

Adjustment Magnitude

The adjustments to net income, stemming from mark-to-market adjustments to available-for-sale securities, are relatively small in comparison to the overall net income figures. This indicates that the company’s investment portfolio, while subject to market fluctuations, does not significantly drive overall earnings volatility.

In summary, the company’s net income experienced fluctuations over the period, with a notable peak in 2024 and a subsequent decline in 2025. The adjustments related to available-for-sale securities are consistently minor and do not materially alter the overall net income picture.

The period under review demonstrates generally consistent performance between reported and adjusted profitability ratios. Minor discrepancies exist, suggesting limited impact from mark-to-market adjustments on available-for-sale securities. Overall, profitability metrics exhibit fluctuations across the five-year span, with a noticeable shift in the latter years.

Net Profit Margin

Both reported and adjusted net profit margins begin at approximately 16% in 2021, declining to around 14% in 2022. A recovery is then observed in 2023, returning to approximately 15.4%, before stabilizing around 14.8% in 2024. A downward trend is evident in 2025, with both reported and adjusted margins decreasing to 12.63% and 12.65% respectively. The consistency between reported and adjusted figures indicates that changes in the fair value of available-for-sale securities have a minimal effect on reported net income.

Return on Equity (ROE)

Reported and adjusted ROE values are closely aligned throughout the period. ROE remains relatively stable around 30% in 2021 and 2022. A significant increase is observed in 2023, reaching approximately 35.7%, followed by a decrease to 30.6% in 2024. ROE recovers somewhat in 2025, reaching 34.0%. The parallel movement of reported and adjusted ROE suggests that adjustments related to available-for-sale securities do not materially alter the overall return to shareholders.

Return on Assets (ROA)

Similar to ROE, reported and adjusted ROA values are nearly identical across all years. ROA begins at approximately 8.6% in 2021, declining to around 8.0% in 2022. It then increases to 9.2% in 2023, before decreasing to 7.6% in 2024. A further decline is observed in 2025, with both reported and adjusted ROA falling to approximately 6.4%. The consistent alignment between reported and adjusted ROA reinforces the conclusion that mark-to-market adjustments have a negligible impact on the efficiency with which assets are used to generate profit.

In summary, the analysis reveals a consistent pattern where adjustments for mark-to-market valuation of available-for-sale securities have a limited impact on the reported profitability ratios. The observed trends in these ratios indicate a period of initial decline followed by recovery, and then a final decline in the most recent year. These fluctuations warrant further investigation to determine the underlying drivers of profitability.

The period between 2021 and 2025 demonstrates fluctuations in both reported and adjusted net income attributable to Honeywell, alongside corresponding changes in net profit margins. While reported and adjusted net income figures are nearly identical each year, a closer examination of the profit margins reveals subtle differences and overall trends.

Adjusted Net Profit Margin Trend

The adjusted net profit margin began at 16.11% in 2021, decreased to 13.98% in 2022, and then recovered to 15.45% in 2023. This was followed by a stabilization at 14.82% in 2024 before declining to 12.65% in 2025. This indicates a period of initial contraction followed by recovery, and then a final decrease over the five-year period.

Year-over-Year Changes

From 2021 to 2022, the adjusted net profit margin experienced a decrease of 2.13 percentage points. A subsequent increase of 1.47 percentage points was observed from 2022 to 2023. The margin remained stable between 2023 and 2024, with a negligible change. Finally, a decrease of 2.17 percentage points occurred between 2024 and 2025, representing the largest single-year decline in the observed period.

Comparison with Reported Net Profit Margin

The adjusted and reported net profit margins are consistently very close in value throughout the period. The difference between the two is consistently less than 0.05 percentage points in each year. This suggests that adjustments made to net income have a minimal impact on the overall profit margin calculation.

The observed trend suggests potential challenges in maintaining profitability towards the end of the period. The decline in the adjusted net profit margin in 2025 warrants further investigation to determine the underlying causes, such as increased costs, pricing pressures, or shifts in product mix.

The period between 2021 and 2025 demonstrates relatively stable performance in both reported and adjusted net income attributable to Honeywell. While fluctuations occur, the adjusted net income mirrors the reported net income closely, suggesting consistency in the adjustments made. A detailed examination of the return on equity (ROE) metrics, both reported and adjusted, reveals specific trends worthy of note.

Reported ROE

Reported ROE begins at 29.85% in 2021, dips slightly to 29.74% in 2022, then experiences a substantial increase to 35.68% in 2023. This is followed by a decrease to 30.64% in 2024, and a subsequent rise to 34.01% in 2025. The volatility suggests sensitivity to changes in net income and potentially equity levels.

Adjusted ROE

Adjusted ROE follows a similar pattern to the reported ROE. Starting at 29.83% in 2021, it declines to 29.69% in 2022, rises significantly to 35.72% in 2023, decreases to 30.65% in 2024, and concludes at 34.05% in 2025. The adjusted ROE values are consistently close to their reported counterparts, indicating that adjustments do not materially alter the overall ROE picture.

ROE Trend Analysis

A peak in ROE, both reported and adjusted, is observed in 2023. This peak is likely attributable to the higher net income recorded in that year. The subsequent decline in 2024 is correlated with a decrease in net income. The recovery observed in 2025, while not reaching 2023 levels, suggests a stabilization of profitability. The relatively small difference between reported and adjusted ROE throughout the period indicates that the adjustments applied are not significantly impacting the overall return on equity calculation.

Net Income Correlation

The fluctuations in both reported and adjusted ROE closely mirror the fluctuations in reported and adjusted net income. This correlation highlights the significant influence of profitability on the company’s return on equity. Years with higher net income generally correspond with higher ROE values, and vice versa.

In summary, the ROE metrics demonstrate a cyclical pattern influenced by net income performance. The consistency between reported and adjusted ROE suggests that the company’s adjustments are not fundamentally altering the underlying profitability picture. The peak in 2023 and subsequent moderation in 2024 and 2025 warrant further investigation into the factors driving these changes in net income.

The period under review demonstrates fluctuations in both reported and adjusted net income attributable to Honeywell, which correspondingly influence reported and adjusted return on assets (ROA). While reported and adjusted net income figures remain closely aligned across the observed years, a pattern of initial increase followed by decline is evident in both metrics.

Reported ROA

Reported ROA begins at 8.60% in 2021, decreases to 7.97% in 2022, then increases to a peak of 9.20% in 2023. A subsequent decline is observed in 2024, falling to 7.59%, and continues downward in 2025 to 6.42%. This indicates a period of strengthening asset utilization efficiency followed by a weakening trend.

Adjusted ROA

Adjusted ROA mirrors the trend of reported ROA closely. Starting at 8.59% in 2021, it decreases to 7.96% in 2022, rises to 9.20% in 2023, and then declines to 7.59% in 2024 and 6.43% in 2025. The consistency between reported and adjusted ROA suggests that adjustments to net income have a minimal impact on the overall return on assets calculation.

The observed increase in ROA in 2023, for both reported and adjusted figures, suggests improved profitability relative to asset base during that year. However, the subsequent declines in 2024 and 2025 indicate a potential erosion of this efficiency. The consistent downward trend in the final two years warrants further investigation to determine the underlying causes, such as changes in asset deployment, operational performance, or broader economic factors.

Net Income Trend

Both reported and adjusted net income attributable to Honeywell follow a similar pattern: a decrease from 2021 to 2022, an increase from 2022 to 2023, and a decline from 2023 to 2025. This suggests that the fluctuations in ROA are directly linked to changes in the company’s profitability.

The relatively small difference between reported and adjusted net income throughout the period suggests that the adjustments made are not substantial enough to significantly alter the overall financial picture. However, understanding the nature of these adjustments could provide additional insights into the company’s earnings quality.