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Honeywell Reports Full-Year Sales Up 4% To $39.1 Billion; Proforma Earnings Per Share Up 11% To $4.97 Per Share; Reported Earnings Per Share Of $4.92

  • 4Q13 - 5% Organic Sales Growth; Proforma EPS $1.24, Up 13%, On Stronger Operations
  • 4Q13 Reported EPS $1.19, Includes ($0.05) Pension MTM Related To International Plans
  • $0.16 EPS Gain Funds Proactive Restructuring And Other Actions - Including Friction Sale
  • Reaffirming 2014 Proforma EPS Guidance Of $5.35 - $5.55, Up 8-12%
MORRIS TOWNSHIP, N.J., January 24, 2014 -- Honeywell ( NYSE: HON) today announced its results for the fourth quarter and full year 2013:
Total Honeywell
($ Millions, except Earnings Per Share) FY 2012 FY 2013 Change
Sales 37,665 39,055 4%
Segment Margin 15.60% 16.30% 70 bps
Operating Income Margin1 13.60% 14.20% 60 bps
Earnings Per Share (Reported) $3.69 $4.92 33%
Earnings Per Share (Proforma) 1 $4.48 $4.97 11%
Cash Flow from Operations 3,517 4,335 23%
Free Cash Flow2 3,672 3,808 4%

4Q 2012
4Q 2013 Change
Sales 9,581 10,387 8%
Segment Margin 15.60% 16.10% 50 bps
Operating Income Margin1 13.90% 13.40% (50) bps
Earnings Per Share (Reported) $0.32 $1.19 272%
Earnings Per Share (Proforma) 1 $1.10 $1.24 13%
Cash Flow from Operations 1,349 1,668 24%
Free Cash Flow2 1,311 1,402 7%
1. Proforma, V% / bps Exclude Pension Mark-to-Market Adjustment 2. Free Cash Flow (Cash Flow from Operations Less Capital Expenditures) Prior to Any NARCO Trust Establishment Payments, Cash Pension Contributions, and Cash Taxes Relating to the Sale of Available for Sale Investments "Honeywell had a very strong fourth quarter, capping off a terrific year across the board with record sales, margins, and earnings," said Honeywell Chairman and CEO Dave Cote. "Even in a continued slow-growth environment, our 2013 sales grew 4% and proforma earnings were up 11%, above our guidance, exiting the year with better than expected sales in every business. We generated strong margin expansion driven by excellent execution, with benefits from continued traction on our key process and productivity initiatives across the portfolio. We sustained our 'seed planting' investments for the future including innovating new products and technologies, and expanding geographically. We've also proactively funded new repositioning projects by smartly redeploying non-operating gains. Our short-cycle businesses accelerated as we ended the year and our long-cycle order backlog stood at an impressive $15.5 billion. While we think it's prudent to remain cautious on the global economy at this time, we're increasingly confident in our 2014 outlook based on the momentum from the fourth quarter. And, the benefits from smart gain deployment actions position the Company for strong earnings growth and outperformance over the next 5 years."The company is also reaffirming its full-year 2014 guidance:

Full Year Guidance

2014 Current Guidance Change vs. 2013
Sales $40.3 - $40.7B 3% - 4%
Segment Margin 16.6% - 16.9% 30 - 60 bps3
Operating Income Margin1 15.2% - 15.5% 100 - 130 bps
Earnings Per Share1 $5.35 - $5.55 8% - 12%
Free Cash Flow2 $3.8 - $4.0B ~Flat - 5%
1. Proforma, V% / bps Exclude Pension Mark-to-Market Adjustment
2. Free Cash Flow (Cash Flow from Operations Less Capital Expenditures) Prior to Any NARCO Trust Establishment Payments, Cash Pension Contributions, and Cash Taxes Relating to the Sale of Available for Sale Investments
3. Segment Margin ex-M&A up 50 - 80 bps
($ Millions) FY 2012 FY 2013 % Change
Sales 12,040 11,980 ~Flat
Segment Profit 2,279 2,372 4%
Segment Margin 18.90% 19.80% 90 bps
($ Millions) 4Q 2012 4Q 2013 % Change
Sales 3,020 3,099 3%
Segment Profit 601 636 6%
Segment Margin 19.90% 20.50% 60 bps
  • Sales were up 3% compared with the fourth quarter of 2012 driven by 3% Commercial growth and a 2% increase in Defense and Space. Commercial original equipment (OE) sales were approximately flat driven by continued strong OE build rates and favorable platform mix offset by higher payments due to BGA OEM customers. Commercial aftermarket sales were up 5% driven by higher airline spares and strong BGA RMU (Repairs, Modifications, and Upgrades) sales. Defense and Space sales increased 2% driven by a royalty gain and international strength offsetting planned program ramp downs.
  • Segment profit was up 6%, and segment margins expanded 60 bps to 20.5%, primarily due to productivity net of inflation, and commercial excellence, partially offset by investments for growth. BGA OEM payments were offset by a royalty gain in Defense and Space.
Automation and Control Solutions
($ Millions) FY 2012 FY 2013 % Change
Sales 15,880 16,556 4%
Segment Profit 2,232 2,437 9%
Segment Margin 14.10% 14.70% 60 bps
($ Millions) 4Q 2012 4Q 2013 % Change
Sales 4,172 4,576 10%
Segment Profit 645 698 8%
Segment Margin 15.50%
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  • Sales were up 10% reported, up 4% organic, compared with the fourth quarter of 2012, primarily driven by the favorable impact of acquisitions, growth in Energy, Safety, and Security due to strong residential end markets, new product introductions, and strength in the Americas Distribution business.
  • Segment profit was up 8% and segment margins were down (20) bps to 15.3% driven by the dilutive impact of acquisitions, higher Building Solutions and Distribution sales, and continued investments for growth partially offset by volume and productivity net of inflation, including benefits from prior period repositioning.
Performance Materials and Technologies
($ Millions) FY 2012 FY 2013 % Change
Sales 6,184 6,764 9%
Segment Profit 1,154 1,271 10%
Segment Margin 18.70% 18.80% 10 bps
($ Millions) 4Q 2012 4Q 2013 % Change
Sales 1,545 1,734 12%
Segment Profit 210 272 30%
Segment Margin 13.60% 15.70% 210 bps
  • Sales were up 12% reported, 9% organic, compared with the fourth quarter of 2012, driven by the favorable impact of the Thomas Russell acquisition, increased UOP catalyst and gas processing volume, and improved production volumes in Advanced Materials.
  • Segment profit was up 30% and segment margins expanded 210 bps to 15.7% in the fourth quarter primarily due to strong volume and productivity, partially offset by continued investments for growth.
Transportation Systems
($ Millions) FY 2012 FY 2013 % Change
Sales 3,561 3,755 5%
Segment Profit 432 498 15%
Segment Margin 12.10% 13.30% 120 bps
($ Millions) 4Q 2012 4Q 2013 % Change
Sales 844 978 16%
Segment Profit 94 133 41%
Segment Margin 11.10% 13.60% 250 bps
  • Sales were up 16% reported, 15% organic, compared with the fourth quarter of 2012, driven by continued growth from new platform launches, higher global turbo gas penetration and light vehicle production, and an uptick in China commercial vehicle demand.
  • Segment profit was up 41% in the fourth quarter and segment margins expanded 250 bps to 13.6% primarily driven by strong Turbo material productivity and volume leverage, and operational improvements in Friction Materials.
Honeywell will discuss its results during its investor conference call today starting at 9:00 a.m. EST. To participate on the conference call, please dial(800) 862-9098 (domestic) or(785) 424-1051 (international) a few minutes before the 9:00 a.m. EST start. Please mention to the operator that you are dialing in for Honeywell's fourth quarter 2013 earnings call or provide the conference code, HONQ413. You can hear a replay of the conference call from 12:00 p.m. EST, January 24, until 11:59 p.m. EST, January 31, by dialing(800) 283-4799 (domestic) or(402) 220-0860 (international).A real-time audio webcast of the presentation can be accessed at, where related materials will be posted prior to the presentation. The presentation materials will be in Adobe Acrobat format. A replay of the webcast will be available following the presentation at the same link listed above for 30 days.Honeywell ( 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 performance 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 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: MediaRobert C. Ferris (973) 455-3388 Investor Relations Elena Doom (973) 455-2222 Q4 Press Release Financials (vF).pdf