Honeywell’s 2Q03 profits drop nearly 34%
Morris Township, N.J.—Honeywell International reported that its profits decreased 33.9% on earnings of $319 million during the second quarter of 2003 (2Q03) due to decreased revenues in its aerospace and specialty materials divisions and increased expenses for development, administration and pensions.
Morris Township, N.J.— Honeywell International reported July 17 that its profits decreased 33.9% on earnings of $319 during the second quarter of 2003 (2Q03) due to decreased revenues in its aerospace and specialty materials divisions and increased expenses for development, administration and pensions. Earnings were 37 cents per share in 2Q03 and 56 cents per share in 2Q02.
The company’s 2Q03 revenues of $5.7 billion were up 2% from the previous year, driven by 4% of foreign currency translation. Free cash flow of $382 million includes the impact of a $170 million voluntary pension contribution.
'The results for the second quarter represent solid performance for Honeywell with good revenues, earnings and cash flow in a difficult economic environment,' said David Cote, Honeywell’s chairman and CEO. 'We continue to be focused on executing key strategies, improving customer service, reducing cycle times and investing to support our growth initiatives. The results from the quarter reflect the determination of our management team and the efforts of Honeywell employees worldwide.'
Meanwhile, segment profit margins were 8.8% during 2Q03, compared to 12.2% for the same period a year earlier. The increase in pension costs accounted for 1.5 percentage points of this change, and the remainder was primarily caused by declines in commercial aerospace and increased product development and administrative expenses.
Free cash flow equaled 120% of net income, with working capital contributing approximately $100 million in 2Q03, after adjusting for the non-cash impact of foreign currency translation. Cash and cash equivalents reached $2.6 billion, resulting in net debt of $2.8 billion, or 22% of net capital.
'The second quarter also featured significant progress in each of our businesses,' added Cote. 'In addition to the $1.3 billion in new contracts announced at the Paris Air Show, Honeywell's Aerospace business received an order for Primus Epic integrated cockpits for 85 to 135 new Embraer regional jets purchased by US Airways. In another highlight, Primus Epic obtained its first government approval as part of the Bell/Agusta AB139 helicopter's certification in Italy.
'During the quarter in our Automation and Control Solutions (ACS) business, cumulative orders climbed above $240 million for the Experion PKS process control system. Our turbocharger business had its fourth consecutive quarter of double-digit revenue growth, exhibiting strength in all geographic regions. And, we took an important step in the reorganization of our Specialty Materials business by completing transactions with BASF.”
In fact, Frost & Sullivan recently named ACS as its 2003 Industrial Controls Solutions Company of the Year, attributing its success to products, such as the Experion PKS, which automates, controls and monitors manufacturing operations.
Honeywell’s recent investor webcast and related presentation materials are available at www.honeywell.com/investor .
Control Engineering Daily News Desk
Jim Montague, news editor