10-QPeriod: Q1 FY2014

HONEYWELL INTERNATIONAL INC Quarterly Report for Q1 Ended Mar 31, 2014

Filed April 17, 2014For Securities:HONHONIV

Summary

Honeywell International Inc. reported solid financial results for the first quarter ended March 31, 2014. Net sales increased by 4% year-over-year to $9.7 billion, driven by a combination of volume growth and strategic acquisitions. The company demonstrated improved profitability, with net income attributable to Honeywell rising to $1.017 billion, leading to diluted earnings per share of $1.28, up from $1.21 in the prior year period. This performance reflects the company's successful execution of its business strategies across its diverse segments. The company's strong operational execution is further evidenced by a significant increase in cash flow from operating activities, which more than doubled to $688 million. This robust cash generation supports the company's ongoing investments in growth initiatives, share repurchases, and dividend payments. Honeywell also continues to actively manage its portfolio, with a notable divestiture agreement for its Friction Materials business, aligning with its strategic focus on differentiated global technologies.

Financial Highlights

50 data points
Beta

Revenue

$9.68B

28.0% Gross Margin

Net Income

$1.02B

10.5% Net Margin

EPS (Diluted)

$1.28

Total Assets

$45.78B

Cash & Equivalents

$6.67B

Free Cash Flow

$496.00M

Financial Statements
Beta
Revenue$9.68B
Cost of Revenue$6.97B
Gross Profit$2.71B
SG&A Expenses$1.34B
Net Income$1.02B
EPS (Basic)$1.30
EPS (Diluted)$1.28
Shares Outstanding (Basic)784.90M
Shares Outstanding (Diluted)796.40M

Key Highlights

  • 1Net sales increased by 4% to $9.7 billion, driven by volume and acquisitions.
  • 2Net income attributable to Honeywell rose to $1.017 billion, up from $966 million in the prior year.
  • 3Diluted earnings per share (EPS) grew to $1.28 from $1.21.
  • 4Cash flow from operating activities more than doubled to $688 million.
  • 5The company announced a definitive agreement to sell its Friction Materials business, aligning with its strategic focus.
  • 6Selling, general, and administrative expenses increased as a percentage of sales, primarily due to labor costs associated with acquisitions and investments.
  • 7A $105 million gain on the sale of available-for-sale investments positively impacted other income.

Frequently Asked Questions

The primary drivers for the 4% increase in net sales to $9.7 billion were a 1% increase in volume and a 3% contribution from acquisitions and divestitures.

Profitability improved significantly. Net income attributable to Honeywell increased to $1.017 billion from $966 million, and diluted earnings per share rose to $1.28 from $1.21, reflecting strong operational performance across segments.

Honeywell entered into a definitive agreement in January 2014 to sell its Friction Materials business to Federal Mogul Corporation for approximately $155 million. The transaction was expected to close in the second half of 2014, subject to regulatory approvals.

Cash flow from operating activities showed a substantial increase, more than doubling to $688 million from $341 million in the prior year's period. This improvement was mainly due to favorable working capital movements and reduced pension contributions.