Higher Than Expected Q1 Sales, Segment Margins, and EPS; 11% Organic Growth Reflects Traction On New Products and Geographic Expansion
Honeywell announced first quarter 2011 sales were up 15% to $8.9 billion versus $7.8 billion in 2010. Excluding the net impact from acquisitions and foreign exchange, sales were up a record 11% organically with stronger than anticipated growth across each of the company’s businesses. Earnings per share were up 40% to $0.88 versus $0.63 in the first quarter last year. Free cash flow (cash flow from operations less Capex) in the first quarter was $0.4 billion excluding pension contributions (cash flow from operations of a negative $0.4 billion due to a $1 billion contribution to the company’s U.S. pension fund).
“Honeywell is executing well and delivering terrific results, highlighted by another quarter of record organic sales growth, margin expansion, and higher than expected earnings per share,” said Honeywell Chairman and Chief Executive Officer Dave Cote. “I’m very pleased with our start to the year and the continued momentum we’re seeing across the portfolio. We had a particularly robust finish to the quarter with strength in our short-cycle businesses, as well as growth in commercial aerospace spares and the residential and commercial retrofit businesses. Orders in our short-cycle businesses have now increased eight consecutive quarters and our long-cycle backlog continues at near record levels. As a result of our strong first quarter and continued favorable outlook for our major markets, we’re raising our 2011 sales and EPS guidance.”
Honeywell now expects 2011 sales of $36.0-36.6 billion, up from $35.0-36.0 billion, reflecting an increase of 8-10% over 2010; and earnings in the range of $3.80-3.95 per share versus a previous estimate of $3.60-3.80 per share, an increase of 27-32% over 2010 proforma EPS of $3.00 (in each case, this excludes any mark-to-market pension adjustments). The company also reaffirmed that it expects free cash flow of $3.5-3.7 billion excluding any U.S. pension contributions in 2011 (cash flow from operations of $3.3-3.5 billion including pension contributions).
For more information, read the press release or listen to a replay of a Webcast of the Investor Conference Call.
