Honeywell Delivers Strong First Quarter; Raises 2019 Sales And Earnings Per Share Guidance

MORRIS PLAINS, N.J., April 18, 2019

"Honeywell delivered a very strong start to 2019 with first-quarter results that exceeded the high end of our sales and earnings guidance. Organic sales grew 8% led by our long-cycle businesses in commercial aerospace, defense, and warehouse and process automation, and strong demand for commercial fire and security products. Our robust sales growth, supported by winning positions in attractive end markets and the continuous improvements we are making across our supply chain, drove earnings per share of $1.92, seven cents above the high end of our first-quarter guidance and up 13%¹ excluding the impact of the spin-offs." said Darius Adamczyk, chairman and chief executive officer of Honeywell. "Segment margin was above 20% for the second quarter in a row with 120 basis points of segment margin expansion year-over-year driven by the favorable impact of the spin-offs, increased sales volumes, and operational improvements. We also continued to make progress on cash, generating $1.2 billion of adjusted free cash flow², with conversion of 82%, up 14 percentage points year-over-year, while repurchasing $750 million in Honeywell shares in the quarter. We remain on a path to 95% to 100% conversion for the full year."

Adamczyk continued, "As a result of our first-quarter performance and our confidence in our ability to continue to deliver for our shareowners, we are raising our full-year earnings per share guidance to a new range of $7.90 to $8.15, and organic sales guidance to a new range of 3% to 6%." A summary of the company's full-year guidance changes can be found in Table 1.

"We are very pleased with the start to 2019. Organic sales growth was strong in all of our segments this quarter. Our long-cycle backlog increased more than 10%, and our investments in new product development and commercial excellence are delivering results, while positioning the company for short- and long-term success," Adamczyk concluded.

First-Quarter Performance

Honeywell sales for the first quarter were down 15% on a reported basis and up 8% on an organic basis. The difference between reported and organic sales primarily relates to the spin-offs of the Transportation Systems business (formerly in Aerospace) and the Homes and ADI Global Distribution business (formerly in Honeywell Building Technologies) as well as the unfavorable impact of foreign currency translation. First-quarter reported earnings per share was $1.92. The first-quarter financial results can be found in Tables 2 and 3.

Aerospace sales for the first quarter were up 10% on an organic basis driven by robust demand from business aviation original equipment manufacturers, continued strength in the U.S. and international defense business, and growth in the commercial aviation aftermarket. Segment margin expanded 260 basis points to 25.1%, primarily driven by commercial excellence and the favorable impact from the spin-off of the Transportation Systems business.