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Honeywell Delivers $1.71 Earnings Per Share, Up 10 Percent

  • Normalized for Tax, Earnings Per Share of $1.66, Up 11 Percent Excluding Divestitures, Exceeds High End of Guidance Range
  • Reported Sales ~Flat, Organic Up Over 2 Percent
  • Operating Income Margin Expansion of 100 bps, Segment Margin Expansion of 70 bps
  • Free Cash Flow 6X Greater Than First-Quarter 2016
  • Raising Low-End of 2017 EPS Guidance Range by 5 Cents to $6.90 - $7.10

MORRIS PLAINS, N.J., April 21, 2017 --Honeywell (NYSE: HON) today announcedfinancial results for the first quarter of 2017 and updated its full-year 2017earnings guidance.

“Honeywell reported a strong start to 2017,with over 2 percent organic sales growth, 70 basis points of segment marginexpansion, and free cash flow of nearly $800 million that was more than sixtimes greater than 2016. Our strong operational performance resulted in reportedearnings per share of $1.71. Normalizing for tax, earnings per share was $1.66,or 2 cents above the high-end of our first-quarter guidance and up 11 percentversus last year, excluding divestitures,” said Darius Adamczyk, President andChief Executive Officer of Honeywell.


“Each of our businesses contributed,” Adamczyksaid. “The commercial aftermarket within Aerospace and the global distributionbusiness within Home and Building Technologies remained strong. In PerformanceMaterials and Technologies, robust demand for Solstice® low-global-warmingproducts drove double-digit organic growth in Advanced Materials, and improvingconditions in the oil and gas industry bolstered ongoing strength in UOP. InSafety and Productivity Solutions, demand for warehouse solutions andindustrial safety products enabled growth in the quarter.”


Adamczyk concluded, “Our diversified portfolio,coupled with the investments we've made over the past several years, drove our excellentperformance in the first quarter. As a result of our performance, we areraising the low end of our full-year guidance by 5 cents. We now anticipatethat 2017 earnings per share will be $6.90 to $7.10, up 7 percent to 10 percent,excluding divestitures, any pension mark-to-market adjustments, and 2016 debtrefinancing charges. We look forward to continuing our track record ofperformance and we remain focused on accelerating our organic growth,continuing to expand margins by maintaining our productivity rigor, deliveringbest-in-class returns as the leading software-industrial company, and moreaggressively deploying capital.”


Honeywell will discuss the results during itsinvestor conference call today starting at 9:30 a.m. Eastern Daylight Time.

First Quarter Performance

Honeywellsales for the first quarter were flat on a reported basis and up over 2 percenton an organic basis. The difference between reported and organic sales is dueto the impact of foreign currency translation, the 2016 spin-off of the former Resinsand Chemicals business in Performance Materials and Technologies, and the 2016 divestitureof the Aerospace government services business, partially offset byacquisitions, primarily Intelligrated in Safety and Productivity Solutions. Thefirst-quarter financial results can be found in Tables 1 and 2 below.


Aerospace sales for the first quarterwere flat on an organic basis driven by growth in the Air Transport aftermarketand gas turbo penetration in Europe and China, offset by lower OE volumes inBusiness and General Aviation. Overall, Defense and Space sales were flat on anorganic basis in the quarter. Segment margin expanded 90 bps to 22.4 percent,driven by restructuring benefits, productivity net of inflation, and commercialexcellence, partially offset by lower Business and General Aviation volumes.


Home and Building Technologies sales forthe first quarter were up 3 percent on an organic basis driven by strongperformance in Distribution, air and water products growth in China, and theimpact of new product introductions. Segment margin expanded 70 bps to 15.2percent, driven by restructuring benefits and productivity net of inflation,partially offset by growth investments.


PerformanceMaterials and Technologies sales forthe first quarter were up 5 percent on an organic basis driven by a continued increasein Solstice® sales in Advanced Materials and strong modular gasprocessing growth in UOP. Segment margin expanded 260 bps to 22.8 percent,driven by productivity net of inflation, commercial excellence, and highersales volume.


Safetyand Productivity Solutions sales for the first quarter were up 3 percent onan organic basis as a result of higher volumes in safety products and workflow solutions. Segment margin improved 50bps to 14.7 percent, primarily driven by restructuring benefits andproductivity, net of inflation, partially offset by acquisition amortizationand integration costs. Excluding the impact of acquisitions, segment marginexpanded by more than 300 bps.

Toparticipate in today's conference call, please dial (888) 349-9618 (domestic)or (719) 325-2385 (international) approximately ten minutes before the 9:30a.m. EDT start. Please mention to the operator that you are dialing in forHoneywell's first quarter 2017 earnings call or provide the conference code HON1Q17. Thelive webcast of the investor call as well as related presentation materialswill be available through the “Investor Relations” section of the company'sWebsite (www.honeywell.com/investor).Investors can hear a replay of the conference call from 1:30 p.m. EDT, April21, until 1:30 p.m. EDT, April 28, by dialing (888) 203-1112 (domestic) or(719) 457-0820 (international). The access code is 7717044.

TABLE1: SUMMARY OF FINANCIAL RESULTS &endash; TOTAL HONEYWELL

1Q 2016

1Q 2017

Change

Sales

9,522

9,492

~Flat

Organic

2%

Segment Margin

18.1%

18.8%

70 bps

Operating Income Margin

17.8%

18.8%

100 bps

Earnings Per Share

Reported

$1.56

$1.71

10%

Ex-Divestitures, Normalized for Expected Full-Year Tax Rate of 25%

$1.50

$1.66

11%

Cash Flow From Operations

319

940

195%

Free Cash Flow1

125

772

518%

TABLE 2: SUMMARY OF FINANCIALRESULTS &endash; SEGMENTS

AEROSPACE

1Q 2016

1Q 2017

Change

Sales

3,705

3,546

(4%)

Segment Profit

798

796

~Flat

Segment Margin

21.5%

22.4%

90 bps

HOME AND BUILDING TECHNOLOGIES

Sales

2,477

2,553

3%

Segment Profit

360

389

8%

Segment Margin

14.5%

15.2%

70 bps


PERFORMANCE MATERIALS AND TECHNOLOGIES

Sales

2,281

2,069

(9%)

Segment Profit

461

471

2%

Segment Margin

20.2%

22.8%

260 bps

SAFETY AND PRODUCTIVITY SOLUTIONS

Sales

1,059

1,324

25%

Segment Profit

150

194

29%

Segment Margin

14.2%

14.7%

50 bps

Ex-M&A

330 bps



1Cash Flow FromOperations Less Capital Expenditures

Honeywell (www.honeywell.com) is a Fortune100 software-industrial company that delivers industry specific solutions thatinclude aerospaceand automotive products and services; control technologies for buildings,homes, and industry; and performance materials globally. Our technologies help everything from aircraft, cars, homes andbuildings, manufacturing plants, supply chains, and workers become moreconnected to make our world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.


Press Release Financial Statements 2Q 2017 - FINAL pdf

Mark Macaluso
Investor Relations