Sales of $US6.4 billion were up 11 per cent compared to 2003, resulting from organic sales growth in all four operating segments. Cash flow from operations was $645 million and free cash flow (cash flow from operations less capital expenditures) was $US525 million.
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“These results reflect another quarter of strong sales and earnings, due to solid operational execution and continued business improvement,” said Honeywell Chairman and Chief Executive Officer Dave Cote.
“Each of our operating segments experienced increased orders and organic sales growth. Segment profit increased 20 per cent due to good volume conversion, offset by higher raw material costs in the non-core businesses of Specialty Materials.
“We continue to strengthen our balance sheet and drive free cash flow while at the same time investing in productivity and growth initiatives across the company.”
Net income increased to $US372 million for the quarter, including the impact of $US105 million of pre-tax pension expense. Free cash flow of $US525 million equals 141 per cent of net income. Also, subsequent to quarter end, Standard and Poor’s Ratings Services affirmed its “A/A-1” corporate credit rating on Honeywell and revised its outlook to stable from negative.
“Growth initiatives in each operating segment are gaining momentum and driving new business,” Mr. Cote said. “During the quarter, Aerospace’s Primus Epic(R) integrated cockpit system was certified on the Gulfstream G450.
Automation and Control Solutions introduced FocusPRO 5000, a digital thermostat, and experienced double-digit orders growth in both its Building and Process Solutions businesses.