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4/20/2012 
Honeywell First Quarter Sales Up 7% To $9.3 Billion; And Earnings Up 18% To $1.04 Per Share 


• Higher Than Expected Organic Sales, Segment Margin and EPS – Broad Based Overdrive
• 6% Organic Growth Reflects New Products and Technologies, Geographic Expansion
• Raising 2012 Proforma EPS Guidance to $4.35 – $4.55, Up From $4.25 - $4.50


MORRIS TOWNSHIP, N.J., April 20, 2012 -- Honeywell (NYSE: HON) today announced its results for the first quarter of 2012:

 

Total Honeywell




($ Millions, except Earnings Per Share)

 1Q 2011

 1Q 2012

% Change

 

Sales

8,672

9,307

7%

Earnings Per Share from Continuing Operations

$0.86

$1.04

21%

Earnings Per Share

$0.88

$1.04

18%

Cash Flow from Operations

(443)

196

N/A

Free Cash Flow*

446

300

(33%)

* Free Cash Flow (cash flow from operations less capital expenditures) prior to cash pension contributions

“Honeywell had a terrific start to the year highlighted by higher than expected organic sales, 70 basis points of margin expansion, and strong double-digit earnings growth,” said Honeywell Chairman and Chief Executive Officer Dave Cote. “We’ve seen good momentum in the U.S. and our key high growth regions, which is more than offsetting softness in Europe impacting our short-cycle businesses. Our long-cycle businesses, namely commercial aerospace and UOP, had particularly strong growth, overdriving expectations in the quarter.  As a result of our strong first quarter and continued favorable outlook for our major markets, we’re raising our 2012 earnings per share outlook. Our continued seed planting, coupled with great positions in good industries and the Five Initiatives – growth, productivity, cash, people, and our enablers - will remain the keys to our continued outperformance in 2012 and over the long-term.”

 

The company is updating its full-year 2012 sales and EPS guidance and now expects:

 

Full Year Guidance





2012

2012

 


Prior
Guidance

Revised Guidance

% Change
vs. 2011

Sales

$37.8 - 38.9B

$38.0 - 38.6B

4% - 6%

Earnings Per Share from Continuing Operations(1)

 $4.25 - $4.50

$4.35 - $4.55

9% - 14%

Earnings Per Share(2)

 $4.25 - $4.50

$4.35 - $4.55

7% - 12%

Free Cash Flow(3)

 ~$3.5B

~$3.5B

~100% conversion





(1) Proforma (Ongoing Operations); V% Excludes Any Mark-to-Market Pension Adjustments and Excludes 3Q11 Repo and Other Actions Funded by CPG Gain (in Disc. Ops)

(2) Proforma, V% Excludes Any Mark-to-Market Pension Adjustments

(3) Free Cash Flow (Cash Flow from Operations Less Capital Expenditures) Prior to Any NARCO Related Payments and Cash Pension Contributions

 

 

First Quarter Segment Performance

 

Aerospace




($ Millions)

1Q 2011

1Q 2012

 % Change

Sales

2,696

2,950

9%

Segment Profit

467

534

14%

Segment Margin                                               

17.3%

18.1%

 80 bps

 

• Sales were up 9% compared with the first quarter of 2011.  Organic growth was 8%   which was primarily driven by an 18% increase in our Commercial end markets, partially offset by lower services revenue in Defense and Space.  Commercial OE sales were up 22%, or 18% organic excluding the impact of the EMS acquisition.  Commercial aftermarket sales were up 16% with growth in both spares and R&O.
• Segment profit was up 14% and segment margin increased 80 bps to 18.1%, primarily due to strong commercial aftermarket volume and productivity, net of inflation and higher investments in R&D.

 

Automation and Control Solutions




($ Millions)

1Q 2011

1Q 2012

% Change

Sales

3,656

3,788

4%

Segment Profit                                                

459

491

7%

Segment Margin

12.6%

13.0%

 40 bps

 

• Sales were up 4%, 3% organic, compared with the first quarter of 2011 driven by growth in Process Solutions and Building Solutions and Distribution, partially offset by a modest (1%) organic decline in Energy, Safety and Security as a result of market headwinds in several of our short cycle businesses.  ACS continues to benefit from new product introductions, geographic expansion, and favorable macro trends such as safety, security, and energy efficiency. 
• Segment profit was up 7% and segment margins were up 40 bps to 13.0% driven by productivity benefits net of inflation, and the absence of prior year dilution from acquisitions.

 

Performance Materials and Technologies




($ Millions)

 1Q 2011

 1Q 2012

 % Change

Sales

1,355

1,615

19%

Segment Profit

284

319

12%

Segment Margin

21.0%

19.8%

 (120) bps

 

• Sales were up 19%, 12% organic, compared with the first quarter of 2011, resulting from strong UOP catalyst and licensing sales, the phenol plant acquisition, and strong volumes in Resins & Chemicals, offsetting softer demand in Asia and Europe in Specialty Products and the impact of unfavorable pricing due to more challenging global supply conditions in Fluorines.  Demand for UOP technology offerings and services remained strong with new orders up over 50%.
• Segment profit was up 12% due to higher volumes, partially offset by continued investment to support growth in the business.  Segment margin decreased (120) bps to 19.8%, primarily due to the dilutive impact of the phenol plant acquisition. This is better than expected performance due to less price/raws headwinds than originally planned.

 

Transportation Systems




($ Millions)

1Q 2011

 1Q 2012

 % Change

Sales                                                                  

965

954

(1%)

Segment Profit

118

120

2%

Segment Margin

12.2%

12.6%

40 bps

 

• Sales were down (1%), but up 1% on an organic basis, compared with the first quarter of 2011, due to new business launches and higher diesel penetration, partially offset by lower European vehicle production and aftermarket sales volume.
• Segment profit was up 2% and segment margins increased 40 bps to 12.6% primarily driven by productivity gains including benefits from prior period restructuring actions.


Honeywell will discuss its results during its investor conference call today starting at 9:30 a.m. EDT.  To participate, please dial (631) 291-4830 a few minutes before the 9:30 a.m. EDT start.  Please mention to the operator that you are dialing in for Honeywell’s investor conference call.  The live webcast of the investor call will be available through the “Investor Relations” section of the company’s Website (http://www.honeywell.com/investor).  Investors can access a replay of the conference call from 12:30 p.m. EDT, April 20, until midnight, April 27, by dialing (404) 537-3406.  The access code is 65469116.

 

Honeywell (www.honeywell.com) is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes, and industry; automotive products; turbochargers; and specialty materials. Based in Morris Township, N.J., Honeywell’s shares are traded on the New York, London, and Chicago Stock Exchanges.  For more news and information on Honeywell, please visit www.honeywellnow.com.

 

This release contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, that address activities, events or developments that we or our management intends, expects, projects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are based upon certain assumptions and assessments made by our management in light of their experience and their perception of historical trends, current economic and industry conditions, expected future developments and other factors they believe to be appropriate. The forward-looking statements included in this release are also subject to a number of material risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors affecting our operations, markets, products, services and prices. Such forward-looking statements are not guarantees of future performance, and actual results, developments and business decisions may differ from those envisaged by such forward-looking statements.


Contacts:
Media   
    
Robert C. Ferris  
(973) 455-3388  
rob.ferris@honeywell.com

 

Investor Relations
Elena Doom     
(973) 455-2222
elena.doom@honeywell.com

 

Q1 Press Release Financials (vF).xlsx 

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