Honeywell reports increased sales, profit for third quarter

The third quarter ended on a good note for Honeywell, with the company reporting a 10 percent increase in sales to $8.7 billion, driven by 9 percent organic sales growth. The company attributed such postive results to its consistent performance and global growth, as well as several new multi-year contracts.

"We had strong organic sales growth in each of our businesses in the third quarter," says Honeywell Chairman and Chief Executive Officer Dave Cote. "Customers are confident in Honeywell's differentiated technologies. We believe that the company is well positioned for continued growth and we remain confident in our business outlook."

The company recently reported earnings at $0.81 per share versus $0.66 last year, an increase of 23 percent. Cash flow from operations was $910 million versus $796 million last year, and free cash flow (cash flow from operations less capital expenditures) was up 16 percent to $736 million versus $634 million in the third quarter of 2006.

Honeywell raised its 2007 sales guidance by $300 million to $34.2 billion, an increase of approximately 9 percent from 2006. The company also raised its earnings per share and free cash flow guidance to the high end of previously- stated ranges. Honeywell is forecasting 2007 earnings per share of $3.14 - 3.16, an increase of approximately 25 percent over the prior year, and 2007 free cash flow guidance of $3.0 billion (cash flow from operations of $3.8 billion), more than 20 percent over 2006.

In addition to the aerospace and specialty materials segments, Honeywell's automation and control solutions saw increased sales and profit. The transportation systems segment also saw growth, with sales up 10 percent compared with the third quarter of 2006, driven by increased sales in the company's Turbo business and the favorable impact of foreign exchange.

However, profit for the transportation systems segment was down 4 percent, while its margin decreased 150 bps to 10.1 percent due to material inflation, operational issues in the Consumer Products Group and investments in product development, including the support of key turbo program wins, which more than offset increased productivity, increased prices and lower warranty expense. Turbo Technologies won four turbo diesel programs estimated at approximately $100 million in annual revenues at full production. These vehicles will be introduced in Brazil, Europe and the United States. The first of these programs is expected to launch in 2008. The Consumer Products Group also launched Xtreme Sport™, a new line of premium spark plugs for the growing small engine segment such as ATVs, motorcycles, boats and snowmobiles, and Xtreme Start™, a separate product line for lawn care equipment.

For more information about Honeywell, visit the company's Web site.