What were the primary drivers of the increase in net income during the first quarter of 2013?

The increase in net income was primarily driven by improved segment profits across Honeywell's Aerospace, Automation and Control Solutions, and Performance Materials and Technologies segments, coupled with a reduction in pension expenses. These factors contributed to higher overall profitability compared to the prior year's first quarter.

How is Honeywell managing its significant environmental and asbestos-related liabilities?

Honeywell maintains reserves for estimated future costs related to environmental remediation and asbestos claims. These liabilities are adjusted periodically based on new information and ongoing remediation efforts. The company is actively involved in legal proceedings and settlement agreements to manage these matters and expects to fund expenditures from operating cash flow. Specific details are provided in Note 17 of the financial statements.

What is the company's outlook on liquidity and capital resources?

Honeywell's primary source of liquidity is operating cash flow. The company also utilizes committed credit lines, commercial paper, long-term borrowings, and access to public markets. In the first quarter of 2013, operating cash flow improved significantly. The company is balancing investments in its core businesses, debt reduction, acquisitions, share repurchases, and dividends. The planned acquisition of Intermec, Inc. is expected to be funded through available cash and commercial paper.

Can you explain the change in net sales and the performance across different business segments?

Net sales remained relatively flat, increasing slightly to $9.328 billion. The Aerospace segment saw a slight decrease in sales but an increase in profit. Automation and Control Solutions had flat sales with improved profit. Performance Materials and Technologies experienced a 6% sales increase driven by acquisitions, and Transportation Systems saw a 4% sales decrease. These movements reflect diverse market conditions and strategic initiatives within each segment.

HON 10-Q Quarterly Report Q1 FY2013 — Revenue, Net Income, EPS

Summary

Honeywell International Inc. reported net sales of $9.328 billion for the first quarter of 2013, a slight increase from $9.307 billion in the same period of 2012. Net income attributable to Honeywell increased to $966 million, or $1.21 per diluted share, up from $823 million, or $1.04 per diluted share, in the prior year's first quarter. This growth was primarily driven by improved segment profits across key divisions and lower pension expenses. The company's financial position remained stable, with total assets at $41.80 billion as of March 31, 2013. While total liabilities remained substantial, Honeywell demonstrated effective cash flow management, with operating activities generating $341 million in cash, a significant improvement from $196 million in the prior year. The company also continued its strategic capital allocation through share repurchases and plans for the acquisition of Intermec, Inc. Investors should note the ongoing management of significant environmental and asbestos-related liabilities, which are being addressed through reserves and legal proceedings.

Financial Highlights

50 data points

Beta

Revenue

$9.33B

0.3% Gross Margin

Net Income

$966.00M

0.1% Net Margin

EPS (Diluted)

$1.21

Total Assets

$41.80B

Cash & Equivalents

$4.54B

Free Cash Flow

$193.00M

Financial Statements

Beta

Revenue	$9.33B
Cost of Revenue	$6.78B
Gross Profit	$2.54B
SG&A Expenses	$1.23B
Net Income	$966.00M
EPS (Basic)	$1.23
EPS (Diluted)	$1.21
Shares Outstanding (Basic)	785.80M
Shares Outstanding (Diluted)	797.10M

Key Highlights

1Net sales for Q1 2013 were $9.328 billion, a marginal increase from $9.307 billion in Q1 2012.
2Net income attributable to Honeywell rose to $966 million ($1.21 per diluted share) in Q1 2013, compared to $823 million ($1.04 per diluted share) in Q1 2012, indicating improved profitability.
3Cash flow from operating activities significantly improved, reaching $341 million in Q1 2013, up from $196 million in Q1 2012, highlighting stronger cash generation.
4The company announced its intention to acquire Intermec, Inc. for approximately $600 million, expected to close by Q2 2013, and to be integrated into the Automation and Control Solutions segment.
5Total assets remained stable at $41.80 billion as of March 31, 2013, with total shareowners' equity increasing to $13.53 billion.
6The effective tax rate decreased to 23.1% in Q1 2013 from 26.5% in Q1 2012, primarily due to U.S. retroactive law changes and lower foreign earnings tax rates.
7The company repurchased $139 million of its common stock in Q1 2013, with $1.5 billion remaining under its share repurchase program.

HONEYWELL INTERNATIONAL INC Quarterly Report for Q1 Ended Mar 31, 2013

Summary

Financial Highlights

Key Highlights

Frequently Asked Questions