Reaffirms 2015 Earnings Outlook
- Company Forecasts 2016 Sales Up 4%-6% Reported, Core Organic Up 1%-2%
- 2016 Earnings Growth Driven By Commercial Excellence, Operational Execution, M&A Contribution
- HOS Gold Enterprises Driving Growth and Productivity
- More Than $10B of Capital Deployment In Process, Further Opportunity Ahead
Honeywell (NYSE: HON) today announced its 2016 financial forecast and reaffirmed its 2015 earnings outlook reflected below:
2016 Guidance
| 2015 Guidance | 2016 Guidance | Change | |
| vs. 2015 | |||
| Sales | ~$38.5B | $39.9 – $40.9B | 4% – 6% |
| Core Organic Growth | ~1% | 1% – 2% | |
| Segment Margin | ~18.8% | 18.9% – 19.3% | 10 – 50 bps (2) |
| Operating Income Margin (Ex-Pension MTM) | ~17.9% | 18.0% – 18.4% | 10 – 50 bps (3) |
| Earnings Per Share (Ex-Pension MTM) | ~$6.10 | $6.45 – $6.70 | 6% – 10% |
| Free Cash Flow (1) | $4.2 – $4.3B | $4.6 – $4.8B | 8% – 13% |
1. Cash Flow from Operations Less Capital Expenditures
2. Segment Margin ex-M&A Up 80 – 110 bps
3. Operating Margin ex-M&A Up 80 – 110 bps
“We expect 2016 to be another year of earnings outperformance for Honeywell,” said Honeywell Chairman and CEO Dave Cote. “We have a credible and attainable plan to achieve the guidance we announced today. First, where there are opportunities to support growth to drive outperformance in parts of the portfolio, such as in Fluorine Products, Transportation Systems, and in the High Growth Regions, we will continue to invest in the development of new products and technologies. Second, we will be cautious in our sales planning in the end markets where we see further uncertainty heading into 2016. Third, and consistent with our proven approach, we will plan our costs and spending conservatively, ensuring we remain flexible as a company while driving outstanding operational execution. Finally, we will maintain our ‘seed planting’ investments for the future, supported by our robust pipeline of funded restructuring projects and continued investment in R&D.”
“On 1%-2% core organic growth, we expect segment margin expansion of 80 to 110 basis points (excluding the impact of M&A) driven by our key process initiatives, including HOS Gold,” continued Cote. “We are also excited about the expected 2016 contributions from our recently announced acquisitions. We will have deployed over $10 billion of capital in 2015 through a combination of return-enhancing acquisitions, reinvestments in our businesses, and returns of capital to our shareowners. We are confident that our continued robust cash generation and strong balance sheet will provide us further opportunity to enhance returns for our shareowners.”
Honeywell will discuss its 2016 Outlook during its investor conference call today starting at 9:00 a.m. EST. To participate on the conference call, please dial (888) 349-9582 (domestic) or (719) 457-2666 (international) approximately ten minutes before the 9:00 a.m. EST start. Please mention to the operator that you are dialing in for Honeywell’s 2016 Outlook call. The live webcast of the investor call as well as related presentation materials will be available through the “Investor Relations” section of the company’s Website (www.honeywell.com/investor). Investors can hear a replay of the conference call from 12:00 p.m. EST, December 16, until 12:00 p.m. EST, December 23, by dialing (888) 203-1112 (domestic) or (719) 457-0820 (international). The access code is 950357.
