"Honeywell had a strong start to 2016, delivering on our sales and earnings commitments in the first quarter," said Honeywell Chairman and CEO, Dave Cote. "Earnings per share increased 9% on continued execution across the portfolio. Core organic sales were up 1%, above the high end of our guidance, driven by acceleration in Commercial Aftermarket and Transportation Systems within Aerospace, continued growth in our residential, commercial, and China businesses within ACS, and higher sales in Process Solutions and Fluorine Products in PMT. We announced and closed three acquisitions within ACS and acquired the remaining 30% interest in UOP Russell, which further strengthens our Great Positions in Good Industries. We also opportunistically repurchased over US$1 billion of shares during the quarter, and funded approximately US$40 million in new restructuring projects. As a result of the first quarter performance, we are raising the low end of our full year earnings guidance range to US$6.55 - US$6.70, up 7 - 10%, and remain committed to our full year core organic sales growth and free cash flow outlook."
"Looking ahead, our message and our planning will not change. We will support growth where there are opportunities to drive outperformance, be cautious in our sales planning, plan costs and spending conservatively, and continue to support the seed planting for new products, services, geographies, and process improvements that allow us to perform well now and in the future," concluded Cote.
Automation and Control Solutions
Sales for the first quarter were up 4% on a core organic basis and up 13% reported primarily driven by sales from the Elster acquisition partially offset by the unfavorable impact of foreign currency. Energy, Safety & Security (ESS) sales were flat on a core organic basis (up 16% reported) driven by continued growth in Security and Fire (HSF) on a global basis and further penetration of High Growth Regions (HGR), particularly in China, offset by lower volume in Sensing & Productivity Solutions (S&PS). Building Solutions & Distribution (BSD) sales increased 11% on a core organic basis (up 5% reported) driven by continued strength in Americas Distribution and growth in project installation and services in Building Solutions (HBS).
Segment profit was up 3% and segment margin contracted (140) bps to 14.4% driven by the unfavourable impact of acquisitions. Excluding the impact of acquisitions, segment margin expanded 10 bps driven by productivity, net of inflation, benefits of previously funded restructuring projects, and commercial excellence, partially offset by the unfavourable impact of project installation, services, and distribution sales on margin, and continued investments for growth.
Performance Materials and Technologies
Sales for the first quarter were down (8%) on a core organic basis and down (9%) reported driven by the unfavourable impact of foreign currency and lower raw materials pass-through pricing in Resins & Chemicals, partially offset by the favourable impact of acquisitions. The decrease in core organic sales was primarily driven by lower UOP gas processing, catalyst, and equipment sales as anticipated, partially offset by higher projects and services sales in HPS and higher volume in Fluorine Products.
Segment profit was down (12%) and segment margins contracted (90) bps to 20.6%, driven by the unfavourable impact of lower UOP catalyst shipments and acquisitions, partially offset by the benefits of previously funded restructuring, commercial excellence, and the impact of raw materials pass-through pricing in Resins & Chemicals. Excluding the impact of acquisitions, segment margin contracted (70) bps.
Adapted from press release by Rosalie Starling
Read the article online at: https://www.hydrocarbonengineering.com/refining/22042016/honeywell-reports-1q16-sales-of-us95-billion-3109/