• Core Organic Sales Growth 1%*; Reported Up 3% Due to Sales From Acquisitions
• Segment Margin Improvement of 20 bps Excluding the Impact of M&A
• Repurchased Over $1 Billion of Shares, Deployed ~$1 Billion to Acquisitions
• Raising Low-End of 2016 EPS Guidance Range (Ex-Pension MTM) to $6.55 - $6.70, Up 7% - 10%

MORRIS PLAINS, N.J., April 22, 2016 -- Honeywell (NYSE: HON) today announced its results for the first quarter of 2016:

Total Honeywell

     ($ Millions, Except Earnings Per Share) 1Q 2015 1Q 2016 Change
Sales 9,213 9,522 3%
Segment Margin 18.7% 18.1% (60) bps
Operating Income Margin  17.6% 17.8% 20 bps
Earnings Per Share  $1.41 $1.53 9%
Cash Flow from Operations  421 257 (39%)
Free Cash Flow (1)  256 63 (75%)

(1)    Cash Flow from Operations Less Capital Expenditures

*Throughout this press release, core organic sales growth refers to reported sales growth less the impacts from foreign currency translation, M&A and raw materials pass-through pricing in the Resins & Chemicals business of PMT. The raw materials pricing impact is excluded in instances where raw materials costs are passed through to customers, which drives fluctuations in selling prices not tied to volume growth. A reconciliation of core organic sales growth to reported sales growth is provided in the attached financial tables.

“Honeywell had a strong start to 2016, delivering on our sales and earnings commitments in the first quarter,” said Honeywell Chairman and CEO, Dave Cote.  “Earnings per share increased 9% on continued execution across the portfolio. Core organic sales were up 1%, above the high-end of our guidance, driven by acceleration in Commercial Aftermarket and Transportation Systems within Aerospace, continued growth in our residential, commercial, and China businesses within ACS, and higher sales in Process Solutions and Fluorine Products in PMT.  We announced and closed three acquisitions within ACS and acquired the remaining 30% interest in UOP Russell, which further strengthens our Great Positions in Good Industries.  We also opportunistically repurchased over $1 billion of shares during the quarter, and funded approximately $40 million in new restructuring projects.  As a result of the first quarter performance, we are raising the low-end of our full-year earnings guidance range to $6.55-$6.70, up 7%-10%, and remain committed to our full-year core organic sales growth and free cash flow outlook.” 

“Looking ahead, our message and our planning will not change.  We will support growth where there are opportunities to drive outperformance, be cautious in our sales planning, plan costs and spending conservatively, and continue to support the seed planting for new products, services, geographies, and process improvements that allow us to perform well now and in the future,” concluded Cote. 

The company is updating its full-year 2016 guidance and now expects:
  

2016 Full-Year Guidance         

Prior Guidance Revised Guidance Change vs. 2015  
Sales  $39.9 - $40.9B  $40.3 - $40.9B 4% - 6%
     Core Organic Growth 1% -2% 1% -2% 
Segment Margin 18.9% - 19.3% 18.9% - 19.3% 10 - 50 bps (2)
Operating Income Margin (Ex-Pension MTM) 18.0% - 18.4% 18.0% - 18.4% 10 - 50 bps (3)
Earnings Per Share (Ex-Pension MTM) $6.45 - $6.70 $6.55 - $6.70 7% - 10%
Free Cash Flow (1)  $4.6 - $4.8B  $4.6 - $4.8B 5% - 10%

(1)    Cash Flow from Operations Less Capital Expenditures 
(2)    Segment Margin ex-M&A Up 80 - 110 bps 
(3)    Operating Margin ex-M&A Up 80 - 110 bps 

First quarter 2016 results by business segment are provided below.
  

Segment Performance

Aerospace                               

     ($ Millions)  1Q 2015 1Q 2016 % Change
Sales 3,607 3,705 3%
Segment Profit  752 798 6%
Segment Margin 20.8% 21.5% 70 bps

                                                                                                                                                                                              

  • Sales for the first quarter were up 3% on a reported and core organic basis.  Core organic sales growth was driven by higher repair and overhaul activities, new platform launches and higher global turbo penetration on passenger vehicles, and strong shipments to Business and General Aviation (BGA) and Air Transport and Regional (ATR) OEMs.
  • Segment profit was up 6% and segment margin expanded 70 bps to 21.5%, driven by productivity net of inflation, and commercial excellence, partially offset by continued investments for growth including higher OEM incentives, and the dilutive impact of acquisitions. Excluding the impact of acquisitions, segment margin expanded 90 bps.


Automation and Control Solutions      

     ($ Millions)  1Q 2015 1Q 2016 % Change
Sales 3,264 3,677 13%
Segment Profit  516 530 3%
Segment Margin 15.8% 14.4% (140) bps

                     

  • Sales for the first quarter were up 4% on a core organic basis and up 13% reported primarily driven by sales from the Elster acquisition partially offset by the unfavorable impact of foreign currency.  Energy, Safety & Security (ESS) sales were flat on a core organic basis (up 16% reported) driven by continued growth in Security and Fire (HSF) on a global basis and further penetration of High Growth Regions (HGR), particularly in China, offset by lower volume in Sensing & Productivity Solutions (S&PS).  Building Solutions & Distribution (BSD) sales increased 11% on a core organic basis (up 5% reported) driven by continued strength in Americas Distribution and growth in project installation and services in Building Solutions (HBS).
  • Segment profit was up 3% and segment margin contracted (140) bps to 14.4% driven by the unfavorable impact of acquisitions. Excluding the impact of acquisitions, segment margin expanded 10 bps driven by productivity, net of inflation, benefits of previously funded restructuring projects, and commercial excellence, partially offset by the unfavorable impact of project installation, services, and distribution sales on margin, and continued investments for growth. 


Performance Materials and Technologies                           

     ($ Millions)  1Q 2015 1Q 2016 % Change
Sales 2,342 2,140 (9%)
Segment Profit  503 441 (12%)
Segment Margin 21.5% 20.6% (90) bps

  • Sales for the first quarter were down (8%) on a core organic basis and down (9%) reported driven by the unfavorable impact of foreign currency and lower raw materials pass-through pricing in Resins & Chemicals, partially offset by the favorable impact of acquisitions.  The decrease in core organic sales was primarily driven by lower UOP gas processing, catalyst, and equipment sales as anticipated, partially offset by higher projects and services sales in HPS and higher volume in Fluorine Products.            
  • Segment profit was down (12%) and segment margins contracted (90) bps to 20.6%, driven by the unfavorable impact of lower UOP catalyst shipments and acquisitions, partially offset by the benefits of previously funded restructuring, commercial excellence, and the impact of raw materials pass-through pricing in Resins & Chemicals.  Excluding the impact of acquisitions, segment margin contracted (70) bps.
Honeywell will discuss its results during its investor conference call today starting at 9:30 a.m. EDT.  To participate on the conference call, please dial (877) 879-6207 (domestic) or (719) 325-4942 (international) approximately ten minutes before the 9:30 a.m. EDT start. Please mention to the operator that you are dialing in for Honeywell’s first quarter 2016 earnings call or provide the conference code HON1Q16.  The live webcast of the investor call as well as related presentation materials will be available through the “Investor Relations” section of the company’s Website (www.honeywell.com/investor).  Investors can hear a replay of the conference call from 12:30 p.m. EDT, April 22, until 12:30 p.m. EDT, April 29, by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international). The access code is 3464694.

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; turbochargers; and performance materials.  For more news and information on Honeywell, please visit www.honeywell.com/newsroom.  

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. We identify the principal risks and uncertainties that affect our performance in our Form 10-K and other filings with the Securities and Exchange Commission.


Contacts:

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

Investor Relations
Mark Macaluso 
(973) 455-2222
mark.macaluso@honeywell.com

1Q 2016 Press Release Financials.pdf