Honeywell Expects 2018 Earnings Per Share, Excluding Separation Costs, Of $7.55 - $7.80

    • Expects 2018 Earnings Per Share Growth1 of 6% - 10% or 13% - 17% Normalized for Tax, Driven by Organic Sales Growth of 2% - 4%
    • Expects 2018 Free Cash Flow of $5.2B - $5.9B2, Targeting >20% Growth
    • Anticipates Higher than Planned Sales Growth in the Fourth Quarter of 2017
    • Narrows Fourth-Quarter and Full-Year 2017 EPS Guidance to Upper End of Previous Guidance Ranges


    MORRIS PLAINS, N.J., Dec. 13, 2017 -- Honeywell(NYSE: HON) today announced its 2018outlook and reaffirmed its fourth quarter and full-year 2017 earnings guidance.Honeywell will discuss its 2018 outlook during its investor conference calltoday starting at 8 a.m. EST.

    Honeywell President and Chief Executive Officer Darius Adamczyk said, “Honeywell expects another year of high-quality earningsgrowth in 2018, driven by the significant investments we have made in ourportfolio, including new product introductions, capacity expansions, researchand development, acquisitions, and restructuring. Our great positions ingrowing industries, combined with favorable end-market dynamics, will helpdrive organic sales growth of 2 to 4 percent. We expect to grow segment marginsby 30 to 60 basis points in 2018 thanks to our deployment of HOS Goldcompany-wide, our commercial excellence initiatives, and returns frompreviously-funded restructuring, including the more than $300 million inhigh-return projects we expect to fund in 2017. As a result, we expect 2018 earningsper share growth of 6 to 10 percent excluding estimated SpinCo separation andfrictional tax costs of $0.8 billion to $1.2 billion, and excluding the pensionmark-to-market adjustment and the further impact, if any, from the potentialU.S. tax legislation.”

    Adamczyk continued, “In 2018, we are targeting freecash flow growth of more than 20 percent and intend to continue our aggressivecapital deployment strategy. In the fourth quarter, we will buy back nearly$1.5 billion worth of Honeywell shares and, in late September, we announced a12 percent dividend increase. M&A remains a top priority and we announced investmentsin two companies in the fourth quarter: SCAME Sistemi and FLUX, which expandour Connected Building and Connected Supply Chain offerings, respectively.

    “2018 will be a year of exciting transformationfor Honeywell. We expect that the spin-offs of our homes and globaldistribution and Transportation Systems businesses will be completed by the endof the year. Following these transactions, Honeywell's portfolio will be morefocused and simple with significant opportunities for profitable organic andinorganic growth, while reducing the cyclicality of our total business andleveraging cross-Honeywell synergies,” Adamczyk said. “I am excited about thefuture for Honeywell. We remain focused on delivering the outstanding returns thatshareowners have come to expect from us.”

    The company also provided an update on 2017. Forthe fourth quarter of 2017, Honeywell raised its organic sales growth guidance to7 to 8 percent, driven by its Intelligrated and Safety Products businesseswithin Safety and Productivity Solutions, its Advanced Materials businesswithin Performance Materials and Technologies, and the Aerospace aftermarket.The company narrowed its expected fourth-quarter EPS to the high end of theprevious guidance range, or about $1.84 per share, excluding separation costs.For the full-year 2017, the company also narrowed its organic growth guidanceto about 4 percent and again narrowed its EPS guidance to the high end of theprevious guidance range, or about $7.10, excluding separation costs. A summaryof the guidance changes can be found in the tables below.



    Previous Guidance

    Current Guidance

    Sales Growth

    5% - 7%


    Organic Growth

    4% - 6%

    7% - 8%

    Segment Margin Expansion

    Up 30 - 50 bps


    Down ~(10) bps &endash; Flat


    Earnings Per Share

    $1.79 - $1.84


    Table 2: FULL-YEAR 2017 GUIDANCE3


    Previous Guidance

    Current Guidance


    $40.2B - $40.4B


    Organic Growth

    3% - 4%


    Segment Margin




    Up 70 bps

    Up 60 bps

    Earnings Per Share

    $7.05 - $7.10


    Earnings Growth

    9% - 10%


    Free Cash Flow4

    $4.6B - $4.7B

    $4.6B - $4.7B

    FCF Growth

    5% - 7%

    5% - 7%

    1 EPS, EPS V% exclude estimated separation costs related to the spin-offs of the Homes and Transportation Systems businesses

    2 Cash flow from operations less capital expenditures; excludes estimated separation costs

    3 EPS and EPS V% exclude separation costs related to the spin-offs of the Homes and Transportation Systems businesses

    4 Cash flow from operations less capital expenditures, excluding estimated separation costs

    To participate on the conference call, pleasedial (866) 548-4713 (domestic) or (323) 794-2093 (international) approximately 10minutes before the 8 a.m. EST start. Please mention to the operator thatyou are dialing in for Honeywell's 2018 outlook call or provide the conferencecode HON2018. A real-time audio webcast of the presentation can be accessed at,where related materials will be posted prior to the presentation and a replayof the webcast will be available for 30 days following the presentation. Investorscan hear a replay of the conference call from 1 p.m. EST, December 13, until 1p.m. EST, December 20, by dialing (888) 203-1112 (domestic) or (719) 457-0820. Theaccess code is 8776580.

    Honeywell ( is a Fortune 100 software-industrial company thatdelivers industry specific solutions that include aerospace and automotiveproducts and services; control technologies for buildings, homes, and industry;and performance materials globally. Our technologies help everything fromaircraft, cars, homes and buildings, manufacturing plants, supply chains, andworkers become more connected to make our world smarter, safer, and more sustainable. For more news and information on Honeywell,please visit

    Thisrelease contains certain statements that may be deemed “forward-lookingstatements” within the meaning of Section 21E of the Securities Exchange Act of1934. All statements, other than statements of historical fact, that addressactivities, events or developments that we or our management intends, expects,projects, believes or anticipates will or may occur in the future areforward-looking statements. Such statements are based upon certain assumptionsand assessments made by our management in light of their experience and theirperception 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 anumber of material risks and uncertainties, including but not limited toeconomic, competitive, governmental, and technological factors affecting ouroperations, markets, products, services and prices, as well as the ability toeffect the separations. Such forward-looking statements are not guarantees offuture performance, and actual results, developments and business decisions maydiffer from those envisaged by such forward-looking statements, including withrespect to any changes in or abandonment of the proposed separations. Weidentify the principal risks and uncertainties that affect our performance inour Form 10-K and other filings with the Securities and Exchange Commission.

    This releasecontains financial measures presented on a non-GAAP basis. Honeywell's non-GAAPfinancial measures used in this release are as follows: segment profit, on anoverall Honeywell basis, a measure by which we assess operating performance,which we define as operating income adjusted for certain items as presented inthe Appendix; segment margin, on an overall Honeywell basis, which we define assegment profit divided by sales; organic sales growth, which we define as salesgrowth less the impacts from foreign currency translation and acquisitions anddivestitures for the first 12 months following transaction date; free cashflow, which we define as cash flow from operations less capital expendituresand which we adjust to exclude separation costs, if and as noted in the release;free cash flow conversion, which we define as free cash flow divided by netincome attributable to Honeywell; and earnings per share, which we adjust toexclude pension mark-to-market expenses, to normalize quarterly earnings pershare measures for completed fiscal quarters for the expected effective taxrate as previously guided for the most recently completed fiscal quarter, tootherwise normalize for tax, if and as noted in the release, as well as forother components, such as divestitures, debt refinancings and exclusion ofseparation costs, if and as noted in the release. Other than references toreported earnings per share, all references to earnings per share in this releaseare so adjusted. The respective tax rates applied when adjusting earnings pershare for these items are identified in the release or in the reconciliationspresented in the Appendix. Management believes that, when considered togetherwith reported amounts, these measures are useful to investors and management inunderstanding our ongoing operations and in the analysis of ongoing operatingtrends. These metrics should be considered in addition to, and not asreplacements for, the most comparable GAAP measure. Refer to the Appendixattached to this release for reconciliations of non-GAAP financial measures tothe most directly comparable GAAP measures. A quantitative reconciliation ofreported sales percent change to organic sales percent change has not beenprovided for forward-looking measures of organic sales percent change because managementcannot reliably predict or estimate, without unreasonable effort, thefluctuations in global currency markets that impact foreign currencytranslation, nor is it reasonable for management to predict the timing,occurrence and impact of acquisition and divestiture transactions, all of whichcould significantly impact our reported sales percent change. In addition, forward looking quantitativereconciliations herein exclude separation costs because management cannotreliably predict or precisely estimate, without unreasonable effort, thosecosts given the preliminary nature of the estimates. A reconciliation ofearnings per share, excluding separation costs and pension mark-to-market hasnot been included because management cannot reliably predict or estimate,without unreasonable effort, the pension mark-to-market expense as it isdependent on macroeconomic factors, such as interest rates and the returngenerated on invested pension plan assets, and the separation costs given thepreliminary nature of the estimates. Based on economic and industry conditions,future developments and other relevant factors, these assumptions are subjectto change.

    2018 Outlook Press Release Final PR Non-GAAP Recs pdf

    Mark Macaluso

    Investor Relations

    Scott Sayres