01—Abstract
Summary
Summary of the 10-K filed February 11, 2011. Cited figures are marked; the original filing is the authoritative source.
Honeywell International Inc. reported robust financial performance for the fiscal year ended December 31, 2010.
The company demonstrated resilience and growth, with net sales increasing by 8% to $33.37 billiona, driven by strong performance across most segments, particularly Automation and Control Solutions and Transportation Systems. Net income attributable to Honeywell saw a significant increase to $2.02 billion, or $2.59 per diluted share, up from $1.55 billion, or $2.05 per diluted share, in the prior year. Key drivers for the improved profitability included organic growth, effective cost management, and the benefits of strategic acquisitions.
The company's diverse business segments—Aerospace, Automation and Control Solutions, Specialty Materials, and Transportation Systems—collectively contributed to this positive result. Management highlighted a focus on driving profitable growth through innovation, global expansion, and operational efficiency. Despite facing economic uncertainties and raw material price volatility, Honeywell maintained a strong liquidity position and continued to invest in its businesses, signaling confidence in its future prospects.
02—Key points
Key Highlights
- Net sales grew 8% to $33.37 billion, demonstrating recovery and growth.
- Net income attributable to Honeywell increased to $2.02 billion, with diluted EPS rising to $2.59.
- The Automation and Control Solutions segment showed strong performance with a 9% increase in sales.
- Transportation Systems reported a significant 24% sales increase, driven by Turbo Technologies.
- Aerospace sales remained stable, with defense and space sales showing slight growth.
- The company maintained a strong backlog of $14.6 billion at year-end 2010.
- Honeywell continued to manage costs effectively, with SG&A expenses as a percentage of sales decreasing slightly.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Honeywell International kept $0.06.
- Revenue$32.35B100.0%
- Cost of revenue−$24.72B76.4%
- Gross profit$7.63B23.6%
- Operating costs−$5.68B17.6%
- Operating income$1.94B6.0%
- Interest, other & tax$78.0M0.2%
- Net income$2.02B6.3%
Where FY2010 revenue went
$32.35B- Cost of revenue: $24.72B, 76% of revenue
- SG&A: $4.62B, 14% of revenue
- Operating income: $1.94B, 6.0% of revenue
- R&D: $1.45B, 4.5% of revenue
Kept 6.0% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed February 11, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $32.35B$29.95B | +8.0% |
| Cost of Revenue | $24.72B$23.26B | +6.3% |
| Gross Profit | $7.63B$6.90B | +10.6% |
| R&D Expenses | $1.45B$1.32B | +9.8% |
| SG&A Expenses | $4.62B$4.32B | +6.8% |
| Operating Income | $1.94B$1.49B | +30.3% |
| Net Income | $2.02B$1.55B | +30.6% |
| EPS (Basic) | $2.61$2.06 | +26.7% |
| EPS (Diluted) | $2.59$2.05 | +26.3% |
| Shares Outstanding (Basic) | 773.50M— | — |
| Shares Outstanding (Diluted) | 780.90M755.70M | +3.3% |
05—Questions
Frequently Asked Questions
What were Honeywell's main revenue drivers in 2010?
Honeywell's revenue in 2010 was primarily driven by its four operating segments: Aerospace, Automation and Control Solutions (ACS), Specialty Materials, and Transportation Systems. The ACS segment saw strong growth, boosted by increased sales in its products business and acquisitions. The Transportation Systems segment experienced significant growth, largely due to higher turbocharger sales for both light and commercial vehicles. Specialty Materials also saw a notable increase in sales, particularly in its Advanced Materials business.
How did the company manage costs and expenses in 2010?
Honeywell focused on cost management and operational efficiency. Selling, general, and administrative (SG&A) expenses decreased as a percentage of sales due to higher sales volumes and lower pension expenses, although labor costs increased. The company also benefited from cost savings initiatives and repositioning actions, which contributed to improved gross margins despite higher material and indirect costs. The decrease in interest and other financial charges also supported profitability.
What is Honeywell's outlook for 2011 based on this report?
For 2011, Honeywell's focus areas include driving profitable growth through innovation and global expansion, particularly in emerging markets. They plan to proactively manage raw material costs, enhance liquidity through working capital management, and align investments with long-term growth. The company anticipates a slight decline in defense and space revenue but expects overall performance to remain strong, balancing investments with cost control.
What were the key acquisitions and divestitures mentioned in the report?
In 2010, Honeywell completed the acquisition of Sperian Protection for approximately $1.475 billion, which significantly contributed to the Automation and Control Solutions segment. The company also noted its agreement to sell its Consumer Products Group (CPG) business in early 2011 for approximately $950 million, aligning with its strategy to focus on core technologies.
06—Continue