--------------------------------------------------------------------------------
FREE Complaint SiteRelated Quotes
HON
35 13/16
+0
delayed 20 mins - disclaimer
Tuesday October 17, 7:11 am Eastern Time
Press Release
Honeywell's Ongoing 3rd-Quarter EPS Up 10% To $0.76
Operating Margin Increases To A Third-Quarter Record Of 15.1%
Third-Quarter Sales Growth Driven By Fire & Security, Electronic Materials, Turbochargers, Sensing & Control Products And Aerospace Repair & Overhaul
MORRIS TOWNSHIP, N.J.--(BUSINESS WIRE)--Oct. 17, 2000-- Company Wins Key Aerospace And Industrial Control Contracts And
Launches New Growth Products
Honeywell Expects 4th-Quarter EPS To Range From $0.86 To $0.88, With
Full-Year 2000 EPS Expected To Range From $3.00 To $3.02
Honeywell (NYSE:HON - news) said today that its ongoing third-quarter earnings per share (EPS) were $0.76, up 10% compared to the third quarter of 1999. Ongoing third-quarter earnings per share include a charge for costs related to a product recall in its Truck Brakes business and a gain from the sale of its minority interest in an automotive aftermarket venture.
One-time items in the third quarter include $344 million (pre-tax) in charges related to portfolio changes, including the planned sale of the company's Friction Materials business and the exiting of its minority interest in a basic chemical manufacturer. An additional $116 million (pre-tax) in net repositioning and other charges were incurred in the quarter, primarily related to the company's cost-reduction activities. Including these one-time items, third-quarter earnings per share were $0.35.
Operating margin grew to a third-quarter record of 15.1%. Productivity in the third quarter was 5%, driven by continued aggressive cost-reduction activities, portfolio changes and Six Sigma Plus initiatives. Third-quarter free cash flow before dividends was $337 million.
Sales in the third quarter increased 3%, driven primarily by growth in Fire & Security, Electronic Materials, Turbochargers, Sensing & Control products, CFC-free refrigerants and Aerospace repair and overhaul. Sales growth was partially offset by lower sales in Commercial-Vehicle Braking Systems, Industrial Automation & Control, Home & Building Control products and Carpet Fibers. Sales continue to be negatively affected by a weakened Euro and a supplier issue in the Aerospace Electronics business, which is improving and expected to be substantially resolved by the end of the year.
The company said it expects fourth-quarter EPS to range from $0.86 to $0.88, with full-year 2000 EPS expected to range from $3.00 to $3.02.
``Honeywell met its income and free-cash-flow commitments in the third quarter despite a challenging operating environment,'' said Michael R. Bonsignore, Honeywell's Chairman and CEO. ``Our third-quarter sales growth of 3% was below our expectations, but we are encouraged by the recent favorable customer response to our broad product and service offerings, particularly in Aerospace and Industrial Control. Their renewed commitments to us represent new sources of valuable future revenue growth.
``Like other companies, we are confronting the effects of surging raw material prices, a weakened Euro and pockets of slow economic activity,'' Bonsignore continued. ``But I have great confidence in Honeywell's long-term potential. We have a focused productivity culture across the company, which is enabling us to aggressively reduce our costs. We are moving swiftly in directing our resources to our most valuable core global franchises. And, in this quarter, we saw significant contract wins, exciting new product launches and the acceleration of our e-business initiatives.''
Bonsignore said the company received more than $2 billion in new aerospace customer agreements with Gulfstream and Raytheon in the quarter, as well as a long-term avionics agreement with Dassault. The contracts cover the range of Honeywell aerospace products, including its advanced Primus Epic avionics system, other avionics products and turbofan engines.
Additionally, the company announced that its partnership with GE was awarded a three-year, $196 million U.S. Army development contract to provide 24 gas turbine engines for the Crusader and M1 Abrams battle tanks as the first part of a two-phase program. In the second phase of the program, beginning in 2004, the partnership expects to produce 3,400 engines for the Army.
Honeywell's Industrial Control business signed a ten-year, $117 million ManageAbility(TM) (Total Plant Management) agreement with Syncrude Canada Ltd. that extends the long-standing strategic alliance between the two companies. In the agreement, Honeywell will supply advanced controls and maintenance services for Syncrude modernization and expansion projects. The company is pursuing several similar large-scale contracts with other customers that it expects to close over the next 2-3 quarters.
The third quarter saw the company's introduction of its WebPAD(TM) Internet Appliance, the first wireless, portable tool for high-speed connection to the Internet and centralized home control applications. Sales increased significantly for the company's new Vertical Cavity Surface Emitting Laser (VCSEL) Technology, an advanced semiconductor laser used in computing and networking, sensing and other applications.
``Our e-business activities also gained added traction in the quarter,'' Bonsignore said. ``We added to our rapidly accreting e-hub portfolio of MyPlant.com and MyAircraft.com by launching MyFacilities.com, which is an open electronic community offering products and solutions to help facility management professionals improve productivity and drive down operating costs.''
Honeywell also launched MyConstruction.com, a comprehensive e-hub serving the US$1.2 trillion Asian construction industry. The e-hub's initial rollout in Beijing, China was recently extended to Shanghai.
As of the end of the third quarter, the company had repurchased 4.2 million shares of its common stock as part of its previously announced repurchase plan.
Third-Quarter Segment Highlights
Segment highlights for the third quarter are as follows:
Aerospace Solutions - Segment sales performance was driven by solid growth in commercial repair and overhaul and military aftermarket. Sales growth was offset by divestitures, an improving supplier parts shortage in its Aerospace Electronics business and lower commercial spares sales.
Segment margins expanded in the third quarter primarily due to the benefits of repositioning actions, merger savings and ongoing Six Sigma Plus programs.
Automation & Control - The segment's third-quarter sales growth was driven primarily by Fire & Security products and by double-digit growth in Sensing & Control, which is experiencing strong demand for its full range of products. Sales growth was partially offset by lower sales in Industrial Automation & Control and lower sales of Home & Building Control products.
Segment margins increased due to merger savings, repositioning actions and cost reductions.
Performance Materials - Sales growth was driven by continued strong demand for advanced circuitry and wafer-fabrication products supplied by the Electronic Materials business, and by growth in the segment's line of CFC-free refrigerants and Chemical Specialties products. The segment's sales growth was offset by a weakened Euro, divestitures and lower sales in Carpet Fibers.
The segment's margins increased due to aggressive cost-reductions being implemented across its businesses, which helped to offset higher raw material costs and repositioning actions.
Power & Transportation Products - Third-quarter sales performance was led by strong growth in Turbochargers as a result of increasing global demand. Sales growth was offset by significantly lower sales in the Truck Brakes business due to declining commercial truck builds.
Segment margins were down due to the Truck Brakes recall.
Honeywell is a US$24-billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; power generation systems; specialty chemicals; fibers; plastics; and electronic and advanced materials. The company is a leading provider of software and solutions, and Internet e-hubs including MyPlant.com, MyFacilities.com and MyAircraft.com (joint venture with United Technologies and i2 Technologies). Honeywell employs approximately 120,000 people in 95 countries and is traded on the New York Stock Exchange under the symbol HON, as well as on the London, Chicago and Pacific stock exchanges. It is one of the 30 stocks that make up the Dow Jones Industrial Average and is also a component of the Standard & Poor's 500 Index. Additional information on the company is available on the Internet at www.honeywell.com. |
