Honeywell announced second quarter 2016 sales of $10.0 billion, up 2% and earnings per share (EPS) up 10% to $1.66. The Company also announced that it is realigning its Automation and Control Solutions business segment into two new segments: Home and Building Technologies (HBT) and Safety and Productivity Solutions (SPS). Sales grew by 1% with core organic sales down by 2% and segment margin improved 10 bps.
“Honeywell grew earnings 10% in the second quarter, capping off a strong first half of 2016,” said Honeywell Chairman and CEO Dave Cote. “Sales in the quarter of $10.0B were in-line with our expectations driven by contributions from each of our business groups. In Aerospace, we saw continued momentum in Commercial Aviation Aftermarket and Transportation Systems. ACS had strong growth in Security and Fire, Buildings Solutions and Distribution, and its China business. And, PMT saw higher sales in Process Solutions and Fluorine Products, where we continue to outperform.”
“In the second quarter, we also continued to smartly deploy capital to position our businesses for sustainable growth, to add to our Great Positions in Good Industries, and to drive shareowner value. Earlier this month, we announced the acquisition of Intelligrated, a leader in supply chain and warehouse automation technologies, for $1.5 billion. This business complements our suite of transportation and logistics technologies with warehouse execution software and other technologies enabling superior efficiency in warehouse and distribution operations. We also repurchased approximately $500 million of shares during the quarter, bringing our year-to-date total to $1.6 billion, and funded $97 million in new restructuring projects.”
“As a result of our first half performance, we are raising the low-end of our full-year earnings guidance range to $6.60-$6.70, up 8%-10%. We will continue to support growth, focusing on winning in High Growth Regions, advancing our superior software capabilities, and effectively using HOS Gold to drive breakthrough initiatives and deliver high-quality products to our customers globally,” continued Cote.
“ACS is coming off a strong quarter and has established momentum in key software-driven markets where our products and services give us a competitive advantage, especially given our recent acquisitions such as Elster, Xtralis, Intelligrated, and Movilizer,” said Cote. “We have removed layers from our organizational structure and are well-positioned to implement a more focused segment reporting alignment that fits our HOS Gold approach to drive breakthrough strategies and speed up new product introduction. This new structure will also help us better serve our customers. Our success through acquisition and NPI has resulted in a much broader portfolio that has outgrown the existing ACS construct. Having two more nimble segments will promote greater customer intimacy and responsiveness. The separation into two businesses will also enable increased efficiency and speed of decision-making as well as a more comprehensive integrated suite of technologies for the respective end markets.”