web : www.honeywell.com
location : New Delhi
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
“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.”
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.
• 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.
• 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.
• 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.
• 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.
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.
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.