What was the primary driver of Honeywell's revenue growth in the third quarter of 2018?

Honeywell's revenue growth in the third quarter of 2018 was primarily driven by organic sales growth across its key business segments, including Aerospace, Home and Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions. Net sales increased by 6% year-over-year to $10.8 billion.

How did the spin-off of the Transportation Systems business impact Honeywell?

The spin-off of the Transportation Systems business, creating Garrett Motion Inc., was completed on October 1, 2018. This strategic move aims to unlock value and allow Honeywell to focus on its core businesses. The financial statements reflect the operations of this business up to the spin-off date. The company also entered into certain agreements with Garrett related to liabilities and funding post-spin-off.

What significant charges or liabilities did Honeywell report in this period?

Honeywell reported repositioning and other charges totaling $756 million for the nine months ended September 30, 2018, related to workforce reductions, asset impairments, and exit costs. Additionally, the company provided updated disclosures on its asbestos-related liabilities for both NARCO and Bendix businesses, including a revision to the accounting treatment for Bendix unasserted claims, which led to a restatement of prior periods and an increase in the estimated liability. There was also a $30 million measurement period adjustment related to U.S. Tax Reform.

How did the adoption of new accounting standards affect the financial statements?

Honeywell adopted new guidance on revenue recognition from contracts with customers on January 1, 2018, using a modified retrospective approach. This resulted in a net decrease to opening retained earnings of $75 million and adjustments to accounts receivable, deferred revenue, and other assets/liabilities. The company also adopted new guidance on pension costs, reclassifying non-service components of net periodic pension costs to 'Other (income) expense'.

HON 10-Q Quarterly Report Q3 FY2018 — Revenue, Net Income, EPS

Summary

Honeywell International Inc.'s third quarter 2018 results showed robust top-line growth with net sales increasing by 6% to $10.8 billion compared to the prior year period, driven by organic growth across its key segments. The company demonstrated strong operational execution, leading to a significant increase in net income attributable to Honeywell by 74% to $2.3 billion, with diluted earnings per share rising to $3.11 from $1.74 in the same quarter last year. This performance was bolstered by favorable tax impacts from legal entity restructuring and effective cost management. The company also successfully completed the spin-off of its Transportation Systems business (Garrett Motion Inc.) on October 1, 2018, which is expected to unlock further value and streamline its portfolio. The balance sheet reflects solid liquidity with $9.8 billion in cash and cash equivalents. The company continued its capital allocation strategy by repurchasing $2.3 billion in shares and increasing its quarterly dividend. Despite ongoing repositioning and other charges, particularly related to asbestos liabilities and business transformations, Honeywell's core operations show resilience and positive momentum heading into the final quarter of 2018.

Financial Highlights

53 data points

Beta

Revenue

$10.76B

0.3% Gross Margin

Net Income

$2.34B

0.2% Net Margin

EPS (Diluted)

$3.11

Total Assets

$61.93B

Cash & Equivalents

$9.80B

Free Cash Flow

$1.70B

Financial Statements

Beta

Revenue	$10.76B
Cost of Revenue	$7.56B
Gross Profit	$3.21B
SG&A Expenses	$1.52B
Net Income	$2.34B
EPS (Basic)	$3.15
EPS (Diluted)	$3.11
Shares Outstanding (Basic)	741.80M
Shares Outstanding (Diluted)	752.00M

Key Highlights

1Net sales increased by 6% to $10.8 billion for the third quarter of 2018 compared to the prior year period, driven by organic growth.
2Net income attributable to Honeywell surged by 74% to $2.3 billion, with diluted EPS increasing to $3.11 from $1.74 year-over-year.
3The company successfully completed the spin-off of its Transportation Systems business (Garrett Motion Inc.) on October 1, 2018.
4Cash provided by operating activities increased by $1.1 billion to $4.9 billion for the nine months ended September 30, 2018.
5The company repurchased $2.3 billion of its common stock during the nine months ended September 30, 2018.
6Honeywell maintained strong liquidity, with $9.8 billion in cash and cash equivalents as of September 30, 2018.
7The effective tax rate decreased significantly in the quarter due to a reduction in accrued withholding taxes related to unremitted foreign earnings.

HONEYWELL INTERNATIONAL INC Quarterly Report for Q3 Ended Sep 30, 2018

Summary

Financial Highlights

Key Highlights

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