- HOS Gold, Software Focus Drives Growth And Margin Expansion Across the Portfolio
- Platform Wins, Growth Investments Support Strong Core Organic Sales Growth Outlook For 2017
- Robust Cash Flow Generation Enables Continuation of Flexible Capital Deployment Strategy
Honeywell (NYSE: HON) will hold its annual investor conference in New York City today to reaffirm its first quarter and full year 2016 guidance, highlight its expectations for strong organic sales growth in 2017 and earnings outperformance through 2018, and discuss its software innovations and continued commitment to creating long-term shareholder value.
“Honeywell’s Great Positions in Good Industries have positioned the company for growth over the long term,” said Honeywell Chairman and CEO Dave Cote. “We continue to outperform against our peers driven by our differentiated technology, new product introductions, expansion of our global footprint, HOS Gold, and the benefit from continued growth investments. We generated double-digit earnings growth in 2015 for the sixth consecutive year, reinforcing the power of our operating systems built on HOS Gold.”
“Our business model is working,” continued Cote. “HOS Gold is driving breakthrough innovation, which allows us to outpace our markets, and we have effective internal processes that generate sustainable growth and productivity even in a slower growth environment. Our expansion in key high growth regions and ability to localize our capabilities will accelerate Honeywell’s growth over the remainder of our five-year plan and beyond. Today, more than half of our engineers are focused on software, and, as of 2015, 100% of our businesses developing software are CMMI Maturity Level 5 compatible, which gives us a huge advantage over our competitors and supports double-digit growth in our over $1 billion software portfolio.”
“We deployed over $10 billion of capital in 2015 through a combination of smart acquisitions, reinvestments in our businesses, and returns of capital to our shareowners,” concluded Cote. “We’re very proud of what we’ve been able to accomplish and even more excited about where all of the seed planting is going to take us. There’s a lot of runway in front of us, and the best is certainly yet to come for Honeywell.”
The company reaffirms its 1Q 2016 EPS guidance of $1.48-$1.53 and full-year 2016 guidance:
|
2016 Full-Year Guidance |
||
|
2016 |
Change |
|
|
Sales |
$39.9B – $40.9B |
3% – 6% |
|
Core Organic Growth |
1% – 2% |
|
|
Segment Margin |
18.9% – 19.3% |
10 – 50 bps (2) |
|
Operating Income Margin (Ex-Pension MTM) |
18.0% – 18.4% |
10 – 50 bps (3) |
|
Earnings Per Share (Ex-Pension MTM) |
$6.45 – $6.70 |
6% – 10% |
|
Free Cash Flow (1) |
$4.6 – $4.8B |
5% – 10% |
|
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 |
Related presentation materials and webcast information for the Honeywell Annual Investor Conference are available at www.honeywell.com/investor. A replay of the webcast will be available following the presentation at the same link listed above.
