10-QPeriod: Q1 FY2018

HONEYWELL INTERNATIONAL INC Quarterly Report for Q1 Ended Mar 31, 2018

Filed April 20, 2018For Securities:HONHONIV

Summary

Honeywell International Inc. reported a strong first quarter for 2018, with net sales of $10.39 billion, a 9% increase year-over-year, driven by volume, price, and favorable foreign currency translation. Net income attributable to Honeywell rose to $1.438 billion, translating to diluted EPS of $1.89, up from $1.71 in the prior year period. The company demonstrated solid operational performance across all segments, with Aerospace, Home and Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions all contributing to top-line growth and increased segment profit. The company also provided updates on its strategic initiatives, including ongoing repositioning actions expected to contribute to future cost efficiencies, and its capital allocation priorities. Despite increased repositioning charges and separation costs related to announced spin-offs, Honeywell's robust operating cash flow of $1.136 billion indicates strong financial health and the ability to fund ongoing operations, investments, and shareholder returns.

Financial Highlights

53 data points
Beta

Revenue

$10.39B

30.8% Gross Margin

Net Income

$1.44B

13.8% Net Margin

EPS (Diluted)

$1.89

Total Assets

$60.95B

Cash & Equivalents

$7.90B

Free Cash Flow

$996.00M

Financial Statements
Beta
Revenue$10.39B
Cost of Revenue$7.19B
Gross Profit$3.20B
SG&A Expenses$1.48B
Net Income$1.44B
EPS (Basic)$1.92
EPS (Diluted)$1.89
Shares Outstanding (Basic)750.60M
Shares Outstanding (Diluted)761.00M

Key Highlights

  • 1Net sales increased by 9% to $10.39 billion for the three months ended March 31, 2018, compared to $9.49 billion in the prior year period.
  • 2Net income attributable to Honeywell grew to $1.438 billion, or $1.89 per diluted share, an increase from $1.326 billion, or $1.71 per diluted share, in the same period last year.
  • 3All four reporting segments (Aerospace, Home and Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions) reported sales growth, indicating broad-based demand.
  • 4Aerospace segment sales saw a significant 12% increase, driven by organic growth, foreign currency translation, and the adoption of new revenue recognition standards.
  • 5Operating cash flow remained strong, reaching $1.136 billion for the quarter, an increase of $196 million year-over-year.
  • 6The company repurchased $940 million of its common stock in the quarter, underscoring its commitment to returning capital to shareholders.

Frequently Asked Questions

Honeywell reported a strong first quarter with net sales of $10.39 billion, a 9% increase year-over-year. Net income attributable to Honeywell rose to $1.438 billion, and diluted earnings per share were $1.89, up from $1.71 in the same period last year. All business segments contributed to this growth.

All four segments experienced sales growth. The Aerospace segment saw a 12% increase, driven by organic growth and foreign currency translation. Home and Building Technologies grew by 7%, Performance Materials and Technologies by 8%, and Safety and Productivity Solutions by 9%. This indicates a broad-based performance across Honeywell's diverse portfolio.

Honeywell generated $1.136 billion in cash from operating activities, an increase of $196 million compared to the prior year. The company also repurchased $940 million of its stock during the quarter and has $6.8 billion remaining under its share repurchase program. This demonstrates a healthy liquidity position and a commitment to shareholder returns.

Yes, Honeywell adopted new accounting guidance on revenue recognition (ASC 606) effective January 1, 2018. This adoption resulted in a net decrease to opening retained earnings of $75 million and some reclassifications on the balance sheet, but the company stated that prior period amounts were not adjusted and the impact on revenue for the quarter was noted as a decrease of approximately $120 million compared to the previous accounting method.