Honeywell International Inc
) reported third quarter 2013 net income of $990 million or $1.24
per share versus $950 million or $1.20 in the year-ago quarter.
The reported earnings were in line with the Zacks Consensus
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Revenues in third quarter 2013 increased 3.0% year-over-year to
$9,647 million. Total revenue missed the Zacks Consensus Estimate
of $9,890 billion.
Energy, Safety and Security, and Turbo Technologies benefited in
the reported quarter from improving end markets, new product
introductions, and geographic expansion.
Operating margins expanded 130 bps year over year to 15.2% in the
reported quarter. Productivity was impressive across the
portfolio, enabling further segment margin expansion in all four
segment sales dipped 2% year over year to $2,973 million
primarily due to a decline in the Defense and Space business,
partially offset by Commercial Growth. However, segment profit
increased 3% year over year to $602 million on the back of
commercial excellence and superior productivity net of inflation,
partially offset by lower aftermarket volumes in Defense and
Margins rose 110 bps year over year to 20.2%.
Automation and Control Solutions
segment sales were up 4% year over year to $4.1 billion in the
reported quarter. The growth was driven primarily by new product
launches, growth in energy, safety, and security, and the
favorable impact of acquisitions.
Moreover, segment profit surged 11% to $631 million on the back
of commercial excellence and superior productivity net of
inflation. Margins for this segment also expanded 90 bps year
over year to 15.3%.
segment revenues of $916 million for the quarter increased 6%
year over year due to rise in sales from platform launches, and
advanced turbo gas penetrations in majority of region. However,
decline in European light vehicle production volumes and lower
off-highway sales in the U.S. partially hampered the growth.
In addition, segment profit reported growth of 23% year over year
to $128 million mainly driven by strong productivity and volume
leverage, partially offset by unfavorable pricing. Margins for
this segment came in at 14.0%, up 190 bps year over year.
Performance Materials and Technologies
segment sales increased 10% during the quarter to $1.6 billion
due to acquisition of Thomas Russell, partially offset by
challenging market conditions in Advanced Materials.
However, segment profit increased 11% to $305 million, driven by
favorable margin impact of higher UOP licensing and productivity,
partially offset by inflation and continued investments for
growth. Margins in the segment increased 10 bps year over year to
Cash and cash equivalents at quarter-end was $5.5 billion as of
Sep 30, 2013. Long-term debt at quarter-end was $5.8 billion.
Cash flow from operating activities improved to $1,070 billion as
of Sep 30, 2013 compared with $999 million in the year-ago
Honeywell provided sales guidance for 2013 in the range of $38.8-
$39.0 billion versus its prior guidance of $38.9-$39.3 billion.
Honeywell gave EPS guidance in the range of $4.90 to $4.95 versus
its previous guidance of $4.85-$4.95. Operating margin is
expected to be in the range of 14.7% - 14.8%. Free cash flow is
expected to be approximately $3.7 billion.
Honeywell currently has a Zacks Rank #2 (Buy). Other stocks that
look promising and are worth a look now are
), carrying a Zacks Rank #1 (Strong Buy), and
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Hutchison Whampoa Ltd
), both carrying a Zacks Rank #2 (Buy).