HONA spun-off HON on June 29th as their stand-alone aerospace sibling. Total assets of about $18.86B against total liabilities of $24.37B, leaving negative common equity of roughly -$5.62B. Long-term debt sits at $15.85B, with long-term debt-to-capital above 1.5. Note that $15B of these liabilities was HON debt off-loaded to HONA with significantly better refinancing terms. Q2 revenue was about $4.35B, annualizing near a $17.4B run-rate, with EBIT of $850M implying a mid-teens EBIT margin and 18.4% pretax margin. Net income for the quarter was $634M.
The reason HONA qualifies as true value investing is that their backlog exceeds $19B, with the company trading at a P/E of 28.3 versus a sector average of 39.3. 39% of HONA's revenue is from their Electronic Solutions segment which includes deeply integrated avionics and navigations/sensor systems. The core issue right now is supply chain issues which are actively being resolved.
We've seen spin-offs sputter for at least the first two quarters only to steady climb up after positive earnings reports from established stability from new governance.