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Document Preview Honeywell's Second-Quarter Earnings per Share 37 Cents; Cash from Operations $553 million |
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Title: |
Honeywell's Second-Quarter Earnings per Share 37 Cents; Cash from Operations $553 million |
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2003 |
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$38 |
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#215649 |
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[HONEYWELL LETTERHEAD]
News Release
Contact:
Media Investors
Rich Silverman Dan Gallagher
973-455-4732 973-455-2222
richard.silverman@honeywell.com an.gallagher@honeywell.com
HONEYWELL'S SECOND-QUARTER EARNINGS PER SHARE
37 CENTS; CASH FROM OPERATIONS $553 MILLION
o Revenues of $5.7 billion, up 2% vs. 2002
o Free cash flow of $382 million equals 120% of net income
o More than $1.3 billion in new Aerospace contracts announced at Paris Air Show
o Continued progress on Specialty Materials portfolio
MORRIS TOWNSHIP, N.J., July 17, 2003 -- Honeywell (NYSE: HON) today
announced second-quarter earnings per share of 37 cents, in line with prior
earnings guidance. The results are 19 cents below the same period last year, due
to nine cents worth of higher pension expense, including the effect of dilution
from the prior year's contribution of shares to the company's pension plans;
four cents from lower sales in higher margin businesses; and four cents from
increased product development and other expenses. Revenues of $5.7 billion were
up 2% from the previous year, driven by 4% of foreign currency translation. Free
cash flow of $382 million includes the impact of a $170 million voluntary
pension contribution.
"The results for the second quarter represent solid performance for
Honeywell with good revenues, earnings and cash flow in a difficult economic
environment," said Honeywell Chairman and Chief Executive Officer Dave Cote. "We
continue to be focused on executing key strategies, improving customer service,
reducing cycle times and investing to support our growth initiatives. The
results from the quarter reflect the determination of our management team and
the efforts of Honeywell employees worldwide."
Segment profit margins were 8.8%, compared with 12.2% in the same
period last year. The increase in pension costs accounted for 1.5 percentage
points of the change with the remainder primarily due to declines in commercial
aerospace and increased product development and administrative expenses. Free
cash flow equaled 120% of net income with working capital contributing
approximately $100 million in the quarter after adjusting for the non-cash
impact of foreign currency translation. Cash and cash equivalents reached $2.6
billion, resulting in net debt of $2.8 billion, or 22% of net capital.
-MORE-
{Page}
2-results
"The second quarter also featured significant progress in each of our
businesses," Mr. Cote said. "In addition to the $1.3 billion in new contracts
announced at the Paris Air Show, Honeywell's Aerospace business received an
order for Primus Epic integrated cockpits for 85 to 135 new Embraer regional
jets purchased by US Airways. In another highlight, Primus Epic obtained its
first government approval as part of the Bell/Agusta AB139 helicopter's
certification in Italy.
"During the quarter in our Automation and Control Solutions business
(ACS), cumulative orders climbed above $240 million for the Experion PKS'TM'
process control system. Our turbocharger business had its fourth consecutive
quarter of double-digit revenue growth, exhibiting strength in all geographic
regions. And, we took an important step in the reorganization of our Specialty
Materials business by completing transactions with BASF.
"We also named a highly regarded financial professional to be our new
Chief Financial Officer. Dave Anderson's credibility and experience in global
corporate finance will help Honeywell chart its course for the future."
* * * * *
Second-Quarter Segment Highlights
Aerospace
o Revenues were down 2% compared with the second quarter of 2002, primarily
as a result of commercial aerospace.
o Segment margins were 10.4%, down from 16.5%, due to lower sales of
commercial original equipment and higher-margin commercial spare parts, as
well as higher pension costs.
o The company announced more than $1.3 billion in new orders at the Paris Air
Show, including contract wins to supply avionics, auxiliary power units,
and wing anti-ice valves on easyJet's 120 Airbus A319 aircraft; Primus Epic
integrated cockpits for 100 to 200 new Embraer regional aircraft purchased
by JetBlue; avionics for the F-35 Joint Strike Fighter; pneumatics for
General Electric's GP7200 engine for the Airbus A380 as well as engine
accessories and valves for GE engines that power the U.S. Air Force C5
transport; and weather radar for the U.S. Air Force's fleet of C-17
"Globemaster" transport aircraft.
o The Federal Aviation Administration selected the company to provide
development, manufacturing, airport installation, training and support for
the new satellite-based precision approach and landing system known as the
Local Area Augmentation System, a program with a lifetime value that, with
the exercise of contract options, could exceed $350 million.
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{PAGE}
3-results
Automation and Control Solutions
o Revenues were up 4% compared with the second quarter of 2002, due mostly to
acquisitions and favorable foreign currency translation.
o Segment margins were 9.6%, compared with 12.5% in the second quarter of
2002, driven by increased pension costs, a decline in higher margin sales
in ACS' service business and increased research and development and other
expenses.
o ACS' service business announced a new contract to supply and install
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