Honeywell India

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; turbochargers; and performance materials.

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Honeywell Reports Second Quarter 2014 Sales Up 6% To $10.3 Billion; EPS Of $1.38 Per Share 18 Jul,14


Honeywell Reports Second Quarter 2014 Sales Up 6% To $10.3 Billion; EPS Of $1.38 Per Share; Raising 2014 EPS Guidance 


• Organic Sales Growth 3%; Strong Execution Across The Portfolio 
• EPS Up 8% Reported, Up 12% Using Normalized Tax Rate 
• Raising Low-End Proforma EPS Guidance To $5.45 - $5.55, From $5.40 - $5.55 

MORRIS TOWNSHIP, N.J., July 18, 2014 -- Honeywell (NYSE: HON) today announced its results for the second quarter of 2014:



Total Honeywell      
($ Millions, except Earnings Per Share) 2Q 2013 2Q 2014 Change
Sales 9,693 10,253 6%
Segment Margin 16.10% 16.70% 60 bps
Operating Income Margin 14.30% 15.40% 110 bps
Earnings Per Share $1.28 $1.38 8%
Earnings Per Share (At 26.5% Tax Rate) $1.22 $1.37 12%
Cash Flow from Operations 1,256 1,341 7%
Free Cash Flow * 1,060 1,112 5%
* Cash Flow from Operations Less Capital Expenditures



“Honeywell had another terrific quarter and a very good first half of 2014,” said Honeywell Chairman and CEO Dave Cote. “Strong execution across our businesses and continued momentum across the portfolio helped us to deliver stronger than expected earnings. We saw 6% sales growth and margin expansion in every business as our key growth and productivity initiatives continue to make a difference. Our short-cycle businesses, particularly Energy, Safety and Security and Turbo Technologies, are benefiting from improving end markets, new product introductions, and geographic expansion, while our long-cycle businesses are growing robust backlogs supported by favorable macro trends and strong win rates. Our recently announced closing of the sale of Friction Materials was a significant step in our effort to align the Honeywell portfolio around Great Positions in Good Industries. We believe that our portfolio is well positioned for continued growth. As a result of our first half performance, we are raising the low-end of our 2014 proforma EPS guidance by $0.05 with the expectation of improved organic growth and continued margin expansion in the second half of the year.” 

The company is updating its full-year 2014 guidance and now expects: 


Full-Year Guidance          
  2014   2014   Change
  Prior Guidance   Revised Guidance3   vs. 2013  
Sales  $40.3 - $40.7B    $40.2 - $40.4B   3% - 4%
Segment Margin 16.6% - 16.9%   16.8% - 17.0%   50 - 70 bps
Operating Income Margin1 15.2% - 15.5%   15.4% - 15.6%   120 - 140 bps
Earnings Per Share1 $5.40 - $5.55   $5.45 - $5.55   10% - 12%
Free Cash Flow2  $3.8 - $4.0B    $3.8 - $4.0B   ~15%



1.     Proforma, V% / bps Exclude Pension Mark-to-Market Adjustment

2.     Cash Flow from Operations Less Capital Expenditures

3.     Reflects Absence Of (~$300M) Friction Materials Sales in 2H 2014


On July 14, Honeywell announced that it will realign its Transportation Systems business segment with its Aerospace business segment to better take advantage of the engineering and technology similarities and the shared business models between these two business segments. Under the realigned segment reporting structure, the Company will have three business segments: Aerospace, Automation and Control Solutions, and Performance Materials and Technologies. This realignment has no impact on the Company’s historical consolidated financial position, results of operations or cash flows. Effective with the reporting of third quarter 2014 results, the Company will report its financial performance based on the inclusion of Transportation Systems in Aerospace. To provide historical information on a basis consistent with its new reporting structure, the Company will make available during the third quarter of 2014 certain historical segment results recast to conform to the new reporting structure. The recasted financial information will not represent a restatement of previously issued financial statements. 

Second Quarter Segment Performance



($ Millions) 2Q 2013 2Q 2014 % Change
Sales 2,997 2,991 ~Flat
Segment Profit 583 592 2%
Segment Margin 19.50% 19.80% 30 bps


• Sales were approximately flat compared with the second quarter of 2013 driven by 1% Commercial sales growth, offset by a (1%) decline in Defense & Space. Commercial OE sales were approximately flat in the quarter reflecting continued growth in OE build rates, offset by higher BGA OEM payments and engine shipment timing. Commercial Aftermarket growth of 1% was driven by an increase in spares sales, partially offset by fewer maintenance events. Defense & Space sales declined (1%) as a result of lower sales to the U.S. government, partially offset by strong international growth. 
• Segment profit was up 2%, and segment margins expanded 30 bps to 19.8%, driven by commercial excellence and productivity net of inflation, partially offset by BGA OEM payments, higher OE mix, and continued investments for growth.



Automation and Control Solutions      
($ Millions) 2Q 2013 2Q 2014 % Change
Sales 3,270 3,607 10%
Segment Profit 467 533 14%
Segment Margin 14.30% 14.80% 50 bps



• Sales were up 10% reported, 3% organic, compared with the second quarter of 2013, primarily driven by the favorable impact of acquisitions net of divestitures and growth in Energy, Safety, and Security, particularly Environmental and Combustion Controls and Honeywell Scanning & Mobility. ACS benefitted from strength in U.S. residential end markets and new product introductions, as well as continued growth in fire, gas, and the Americas Distribution business. 
• Segment profit was up 14% and segment margins expanded 50 bps to 14.8% driven by commercial excellence, productivity net of inflation, and higher volume, partially offset by the dilutive impact of acquisitions and continued investments for growth. 

Performance Materials and Technologies      
($ Millions) 2Q 2013 2Q 2014 % Change
Sales 2,479 2,636 6%
Segment Profit 438 475 8%
Segment Margin 17.70% 18.00% 30 bps



• Sales were up 6% compared with the second quarter of 2013, driven by UOP catalyst and gas processing growth and higher sales in Advanced Materials, particularly Fluorine Products. 
• Segment profit was up 8% and segment margins increased 30 bps to 18.0%, driven by productivity net of inflation and higher volume, partially offset by price/raw headwinds in Resins & Chemicals, unfavorable UOP catalyst shipment mix versus the prior year, and continued investments for growth.



Transportation Systems      
($ Millions) 2Q 2013 2Q 2014 % Change
Sales 947 1,019 8%
Segment Profit 126 167 33%
Segment Margin 13.30% 16.40% 310 bps



• Sales were up 8% reported, 4% organic, compared with the second quarter of 2013, driven by continued growth from new platform launches, higher global automotive production, and increased commercial vehicle demand in Europe. 
• Segment profit was up 33% and segment margins increased 310 bps to 16.4% primarily driven by strong Turbo productivity and volume leverage, and operational improvements. 

About Honeywell

Honeywell is a Fortune 100 company that invents and manufactures technologies to address some of the world’s toughest challenges linked to global macrotrends such as energy efficiency, clean energy generation, safety and security, globalization and customer productivity. With approximately 132,000 employees worldwide, including more than 22,000 engineers and scientists, we have an unrelenting focus on performance, quality, delivery, value and technology in everything we make and do.  



Honeywell’s ability to continually improve comes from successfully achieving two seemingly competing tasks at once – productivity and growth. Our global processes – or Enablers – 
are Honeywell’s core internal business processes that drive efficiency and service quality. Enablers bring world-class products and services to market faster and more cost-effectively 
for our customers.

Our Business Units


Honeywell Aerospace mechanical and electrical product offerings are used today on virtually every commercial and defense related aircraft platform. We invent and integrate thousands of products and services that deliver safe, efficient, productive and comfortable experiences worldwide, including flight and runway safety, air traffic management, propulsion, in-flight connectivity tools, precision guidance, wheels and brakes and logistics services.

Automation and Control Solutions

Honeywell Automation and Control Solutions (ACS) develops and manufactures environmental controls, building solutions, personal protective equipment, life safety, security, sensing, scanning, and mobility products that enable safer, more comfortable, more secure, and more productive environments.  Our products and solutions, at work in 150 million homes, 10 million buildings, and hundreds of gas and electric utilities worldwide, give customers the ability to capture more and better data faster and across a wireless landscape, improve productivity, safety, and security, drive better decision making, and reduce costs.

Performance Materials and Technologies

Honeywell Performance Materials and Technologies (PMT) is a global leader in developing advanced materials, process technologies and automation solutions.  It manufactures a wide variety of high-performance products, including environmentally friendlier refrigerants and materials used in the production of products such as bullet-resistant armor, nylon, computer chips and  pharmaceutical packaging. Process technologies developed by PMT’s UOP business form the foundation for most of the world’s refiners, efficiently producing gasoline, diesel, jet fuel, petrochemicals and renewable fuels, and PMT’s Process Solutions business is a pioneer in automation control, instrumentation and services for the oil and gas, refining, pulp and paper, industrial power generation, chemicals and petrochemicals, biofuels, life sciences, and metals, minerals and mining industries.

Transportation Systems

Honeywell Transportation Systems provides world-class technologies and solutions to automakers, their suppliers and consumers. Our technologies enhance the performance and efficiency of passenger and commercial vehicles worldwide, offering a no-compromise solution for fuel efficiency and emissions compliance while still enabling increased horsepower and torque. 

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