What was the primary driver of Honeywell's net sales growth in the third quarter of 2010?

Net sales grew by 9% to $8.4 billion, primarily driven by organic growth (8%), with volume being a key contributor. Acquisitions also contributed 1% to the sales growth, notably the recent acquisition of Sperian Protection.

Why did net income attributable to Honeywell decline despite increased sales?

Net income decreased by 18% in the third quarter compared to the prior year. This was mainly due to a significant increase in repositioning and other charges (from $114 million to $212 million) and higher non-cash pension expenses, which offset the benefits of increased sales and segment profit.

What is the financial impact of the Sperian Protection acquisition?

The acquisition of Sperian Protection, completed in September 2010, had a total value of approximately $1.475 billion, net of cash acquired. This acquisition is expected to strengthen the Automation and Control Solutions segment and is reflected in the increased goodwill and intangible assets on the balance sheet. Its contribution to sales and profit in the current quarter was not material to the consolidated statements.

How did Honeywell's cash flow situation evolve in the first nine months of 2010?

Honeywell generated $3.16 billion in cash from operating activities during the first nine months of 2010, an increase of $543 million compared to the same period in 2009. This improvement was driven by better management of working capital, lower repositioning payments, and increased deferred tax benefits. However, investing activities used significantly more cash ($1.98 billion) due to acquisitions, primarily Sperian.

HON 10-Q Quarterly Report Q3 FY2010 — Revenue, Net Income, EPS

Summary

Honeywell International Inc. reported a solid third quarter of 2010, demonstrating revenue growth across most of its business segments. Net sales increased by 9% year-over-year, reaching $8.4 billion, driven by strong organic growth and contributions from recent acquisitions, particularly Sperian Protection. The company saw notable performance in its Automation and Control Solutions and Transportation Systems segments, both experiencing significant sales increases and profit growth. Aerospace sales showed modest growth, while Specialty Materials also posted strong gains. Despite the positive top-line performance, net income attributable to Honeywell decreased to $499 million ($0.64 per diluted share) from $608 million ($0.80 per diluted share) in the prior-year quarter. This decline was primarily due to increased pension expenses, higher repositioning and other charges, and a higher effective tax rate. However, the company generated robust operating cash flow of $3.16 billion for the nine-month period, underscoring its financial health and ability to fund strategic initiatives, including the acquisition of Sperian and ongoing investments in its core businesses.

Financial Highlights

46 data points

Beta

Revenue

$8.14B

0.2% Gross Margin

Net Income

$598.00M

0.1% Net Margin

EPS (Diluted)

$0.76

Cash & Equivalents

$2.64B

Free Cash Flow

$1.16B

Financial Statements

Beta

Revenue	$8.14B
Cost of Revenue	$6.17B
Gross Profit	$1.97B
SG&A Expenses	$1.13B
Operating Income	$579.00M
Net Income	$598.00M
EPS (Basic)	$0.77
EPS (Diluted)	$0.76
Shares Outstanding (Diluted)	782.80M

Key Highlights

1Net sales increased by 9% to $8.4 billion for the third quarter of 2010, driven by volume, price, and acquisitions.
2Acquisition of Sperian Protection completed in September 2010 for approximately $1.475 billion, bolstering the Automation and Control Solutions segment.
3Net income attributable to Honeywell decreased by 18% to $499 million in the third quarter, primarily due to higher repositioning and other charges and increased pension expenses.
4Earnings per diluted share decreased to $0.64 in the third quarter from $0.80 in the prior year period.
5Operating cash flow remained strong, totaling $3.16 billion for the nine months ended September 30, 2010.
6Significant growth was observed in the Transportation Systems (+19% sales) and Automation and Control Solutions (+9% sales) segments.
7The company continued to manage its long-term debt, repaying $1 billion in notes during the first quarter.

HONEYWELL INTERNATIONAL INC Quarterly Report for Q3 Ended Sep 30, 2010

Summary

Financial Highlights

Key Highlights

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