MORRIS PLAINS, N.J.,
Oct. 6, 2016 /PRNewswire/ --
Honeywell (NYSE: HON) today announced it has updated its previous
guidance for the third quarter of 2016 to reflect the separation of
the former Automation and Control Solutions reporting segment into
two new reporting segments; the acquisition of Intelligrated, which
closed on August 29, 2016; the sale
of the Honeywell Technology Solutions (HTSI) government services
business, which closed on September 16,
2016; the spin-off of Resins and Chemicals as AdvanSix Inc.,
which became effective on October 1,
2016; and lower outlooks in certain business segments.
The company also announced it has elected to adopt the Financial
Accounting Standards Board's (FASB) Accounting Standards Update
2016-09 for stock compensation in the third quarter, which is in
advance of the mandatory 2017 effective date. As a result of the
early adoption, the company is required to report the impacts as
though the accounting standard update had been adopted on
January 1, 2016. Accordingly, the
first- and second-quarter results have been recast to reflect a
$0.03 and $0.04 tax benefit, respectively. Benefits from
the accounting change and sale of HTSI will be deployed to fund
restructuring and other charges in the third quarter.
Third-quarter EPS is now expected to be approximately
$1.60. Excluding restructuring
associated with the $0.07 of
first-half benefits related to stock compensation adoption,
third-quarter EPS is expected to be approximately $1.67, in-line with the prior guidance range.
This guidance also reflects the impact of lower shipments to
Business and General Aviation OEMs, continued program delays and
completions in the domestic and international businesses within
Defense & Space, and lower volumes in Productivity Solutions
(part of Safety and Productivity Solutions).
In addition, the company initiated fourth-quarter EPS guidance
of $1.74-$1.78, up 10%-13%
year-over-year, which excludes any pension mark-to-market (MTM)
adjustment and the impact of a potential fourth-quarter debt
refinancing that would lower interest expense in 2017 and beyond,
but result in a fourth-quarter pre-tax charge of approximately
$140 million. The refinancing
transaction is dependent on continued favorable interest rate and
credit market conditions. Full-year EPS guidance, excluding those
same items, is updated to $6.60-$6.64, up 8%-9% year-over-year. Core
organic sales* are now expected to be down 1-2 percent for the full
year.
The company now expects the following for the third quarter and
fourth quarter 2016:
|
3Q 2016
Guidance
|
|
|
|
|
|
|
|
|
Prior
Guidance
|
Revised
Guidance
|
Change vs.
2015
|
|
Sales
|
$10.0 -
$10.2B
|
~$9.8B
|
2%
|
|
Core Organic
Growth
|
Flat -
1%
|
~(3%)
|
|
|
Segment
Margin
|
18.7% -
18.9%
|
17.3% -
17.5%
|
(180) - (200)
bps(1)
|
|
|
|
|
|
Earnings Per
Share
|
$1.67 -
$1.72
|
~$1.60
|
Flat
|
|
EPS Ex-$0.07 From
1H Accounting Change
Deployed To 3Q Restructuring
|
|
~$1.67
|
|
|
|
|
|
|
4Q 2016
Guidance
|
|
Complete 4Q 2016
guidance will be provided with Honeywell's third-quarter earnings
release on October 21, 2016
|
|
|
|
|
|
|
Guidance
|
Change vs.
2015
|
|
Sales
|
|
$10.1 -
$10.3B
|
1% - 3%
|
|
|
|
|
|
Earnings Per Share
(Ex-Pension MTM)(2)
|
|
$1.74 -
$1.78
|
10% - 13%
|
|
|
(1)
Segment Margin Down (80) - (100) bps ex-M&A And Recognition
of Aerospace OEM Incentives Associated With 3Q
Deployment
|
|
(2)
Excludes Impact From Contemplated Q4 Debt
Refinancing
|
Honeywell will discuss its new reporting segments, portfolio
enhancements, adoption of stock compensation accounting standard,
contemplated fourth-quarter debt refinancing, and updated outlook
during an investor conference call on October 7, 2016, starting at 8 a.m. EDT. To participate, please dial (866)
564-7439 (domestic) or (719) 325-4756 (international) approximately
ten minutes before the 8 a.m. EDT
start. Please mention to the operator that you are dialing in
for Honeywell's update call or provide the conference code
HON3QUPDATE. The live webcast of the investor call, as well as
related presentation materials, will be available through the
Investor Relations section of the company's Website
(www.honeywell.com/investor). Investors can hear a replay of the
conference call from 11 a.m. EDT,
October 7, until 11 a.m. EDT, October
14, by dialing (888) 203-1112 (domestic) or (719) 457-0820
(international). The access code is 1859067.
Honeywell (www.honeywell.com) is a Fortune 100 diversified
technology and manufacturing leader, serving customers worldwide
with aerospace products and services; control technologies for
buildings, homes, and industry; turbochargers; and performance
materials. For more news and information on Honeywell, please
visit www.honeywell.com/newsroom.
This release contains certain statements that may be deemed
"forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934. All statements, other than
statements of historical fact, that address activities, events or
developments that we or our management intends, expects, projects,
believes or anticipates will or may occur in the future are
forward-looking statements. Such statements are based upon certain
assumptions and assessments made by our management in light of
their experience and their perception of historical trends, current
economic and industry conditions, expected future developments and
other factors they believe to be appropriate. The forward-looking
statements included in this release are also subject to a number of
material risks and uncertainties, including but not limited to
economic, competitive, governmental, and technological factors
affecting our operations, markets, products, services and prices.
Such forward-looking statements are not guarantees of future
performance, and actual results, developments and business
decisions may differ materially from those envisaged by such
forward-looking statements. We identify the principal risks and
uncertainties that affect our performance in our Form 10-K and
other filings with the Securities and Exchange Commission.
Information on our third-quarter financial performance contained in
this report is preliminary pending the issuance of our Form 10-Q
for the period ending September 30,
2016.
|
Honeywell
International Inc
|
|
Reconciliation of
Segment Profit to Operating Income and
|
|
Calculation of
Segment Profit and Operating Income Margins (Unaudited)
|
|
(Dollars in
millions)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
September
30,
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
$
1,852
|
|
|
|
|
|
|
|
|
|
Stock compensation
expense (A)
|
|
|
(41)
|
|
|
|
Repositioning and
other (A, B)
|
|
|
(142)
|
|
|
|
Pension ongoing
income (A)
|
|
|
96
|
|
|
|
Other postretirement
expense (A)
|
|
|
(10)
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
$
1,755
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
|
$
1,852
|
|
|
|
÷ Sales
|
|
|
$
9,611
|
|
|
|
Segment Profit Margin
%
|
|
|
19.3%
|
|
|
|
|
|
|
|
|
|
Operating
Income
|
|
|
$
1,755
|
|
|
|
÷ Sales
|
|
|
$
9,611
|
|
|
|
Operating Income
Margin %
|
|
|
18.3%
|
|
|
|
|
|
|
|
|
|
(A) Included in cost
of products and services sold and selling, general and
administrative expenses.
(B) Includes repositioning, asbestos, environmental expenses and
equity income adjustment
|
|
|
|
|
|
|
|
|
We believe these
measures are useful to investors and management in understanding
our ongoing operations and in analysis of ongoing operating
trends
|
|
Honeywell
International Inc
|
|
Reconciliation of
Earnings Per Share to Earnings Per Share, Excluding Pension
Mark-to-Market and Debt Refinancing Expenses (Unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Twelve Months
Ended
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
2015(1)
|
|
|
2015(2)
|
|
|
|
|
|
|
|
|
|
Earnings per share of
common stock - assuming dilution
|
|
$
1.53
|
|
|
$
6.04
|
|
|
Pension
mark-to-market expense
|
|
0.05
|
|
|
0.06
|
|
|
Debt refinancing
expense
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Earnings per share of
common stock - assuming dilution,
|
|
|
|
|
|
|
|
excluding pension
mark-to-market and debt refinancing expenses
|
|
$
1.58
|
|
|
$
6.10
|
|
|
|
|
|
|
|
|
|
(1) Utilizes weighted
average shares of 780.8 million. Mark-to-market uses a
blended tax rate of 36.1%
|
|
|
(2) Utilizes weighted
average shares of 789.3 million. Mark-to-market uses a
blended tax rate of 36.1%
|
|
|
|
|
|
|
|
|
|
We believe EPS,
excluding pension mark-to-market and debt refinancing expenses, is
a measure that is useful to investors and management in
understanding our ongoing operations and in analysis of ongoing
operating trends
|
|
(1) Excludes Impact From Contemplated Q4
Debt Refinancing
* Throughout this press release, core organic sales growth
refers to reported sales growth less the impacts from foreign
currency translation, M&A and raw materials pass-through
pricing in the Resins & Chemicals business of PMT. The raw
materials pricing impact is excluded in instances where raw
materials costs are passed through to customers, which drives
fluctuations in selling prices not tied to volume growth. A
reconciliation of core organic sales growth to reported sales
growth is provided in the attached financial tables.
|
Contacts:
|
|
|
|
|
Media
|
Investor
Relations
|
|
Robert C.
Ferris
|
Mark
Macaluso
|
|
(973)
455-3388
|
(973)
455-2222
|
|
rob.ferris@honeywell.com
|
mark.macaluso@honeywell.com
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/honeywell-updates-financial-guidance-for-new-reporting-segments-portfolio-enhancements-and-segment-outlooks-300340918.html
SOURCE Honeywell