• Strong Productivity Driving EPS Growth of 16%, Up 12% Using Expected Full-Year Tax Rate
• Segment Margin Increase of 100 Bps to 16.2%, Operating Margin Up 120 Bps
• Increasing Low-End 2013 Proforma EPS Guidance to $4.80 - $4.95, From $4.75 - $4.95
“Honeywell delivered better than expected quarterly earnings and margins even in a continued slow global growth environment,” said Honeywell Chairman and CEO Dave Cote. “We had strong productivity in the quarter, and our balanced portfolio of both short- and long-cycle businesses continues to drive our outperformance. As a result of our strong start to 2013, we’re raising the low-end of our full-year earnings guidance by five cents. We’re achieving these results in a slow growth environment while also maintaining our seed planting for the future by investing in new products and technologies, geographic expansion, and driving our key process initiatives. And, it will continue. It’s what will help Honeywell deliver top-tier earnings performance this year and over the long-term.”
First quarter 2013 earnings per share (EPS) reflect a 23.1% effective tax rate compared to 26.5% last year. Using the expected full-year tax rate of 26.5%, EPS growth would have been 12%.
First Quarter Segment Performance:
• Sales were down (1%) compared with the first quarter of 2012 driven by a (1%) decline in our Commercial businesses primarily driven by higher than normal prior year shipments to commercial airline and BGA original equipment customers, and a (1%) decline in Defense and Space, as expected.
• Segment profit was up 3%, and segment margins expanded 80 bps to 18.9%, primarily due to commercial excellence and productivity net of inflation (including prior year impact of customer bankruptcy), partially offset by lower aftermarket volumes.
Automation and Control Solutions
• Sales were approximately flat on both a reported and organic basis compared with the first quarter of 2012. Energy, Safety, and Security sales were up primarily due to growth in ECC and Security products, partially offset by lower sales in Process Solutions and Building Solutions and Distribution.
• Segment profit was up 7% and segment margins were up 80 bps to 13.8% driven by commercial excellence and productivity net of inflation.
Performance Materials and Technologies
• Sales were up 6% reported, down (2%) organic, compared with the first quarter of 2012, resulting from the Thomas Russell acquisition, higher petrochemical catalyst shipments and equipment sales in UOP, partially offset by planned plant outages in Resins & Chemicals and Fluorine Products.
• Segment profit was up 17% and segment margins increased 200 bps to 21.8%, primarily due to higher sales at UOP and favorable price net of inflation, partially offset by lower volume in Advanced Materials and continued investments for growth.
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