- 4Q15 EPS (Ex-Pension MTM) of $1.58, Up 10%; Core Organic Sales ~Flat*
- 4Q15 Segment Margin Improvement of 290 bps to 18.8%, Up 140 bps Ex-4Q14 $184M OEM Incentives
- Completed Acquisition of Elster on December 29, 2015, Integration Underway
- Reaffirming 2016 EPS Guidance (Ex-Pension MTM) of $6.45-$6.70, Up 6-10%
Honeywell (NYSE: HON) today announced results for the fourth quarter and full-year of 2015.
Total Honeywell
| ($ Millions, except Earnings Per Share) | FY 2014 | FY 2015 | Change |
| Sales | 40,306 | 38,581 | -4% |
| Segment Margin | 16.60% | 18.80% | 220 bps |
| Operating Income Margin (Ex-Pension MTM) | 15.10% | 17.90% | 280 bps |
| Earnings Per Share (Reported) | $5.33 | $6.04 | 13% |
| Earnings Per Share (Ex-Pension MTM) | $5.56 | $6.10 | 10% |
| Cash Flow from Operations | 5,024 | 5,454 | 9% |
| Free Cash Flow (1) | 3,930 | 4,381 | 11% |
| 4Q 2014 | 4Q 2015 | Change | |
| Sales | 10,266 | 9,982 | -3% |
| Segment Margin | 15.90% | 18.80% | 290 bps |
| Operating Income Margin (Ex-Pension MTM) | 14.50% | 18.00% | 350 bps |
| Earnings Per Share (Reported) | $1.20 | $1.53 | 28% |
| Earnings Per Share (Ex-Pension MTM) | $1.43 | $1.58 | 10% |
| Cash Flow from Operations | 1,762 | 1,959 | 11% |
| Free Cash Flow (1) | 1,348 | 1,571 | 17% |
(1) Cash Flow from Operations Less Capital Expenditures
*Throughout this press release, core organic sales growth refers to reported sales growth less the impacts from foreign currency translation, M&A and raw materials pass-through pricing in the Resins & Chemicals business of PMT. The raw materials pricing impact is excluded in instances where raw materials costs are passed through to customers, which drives fluctuations in selling prices not tied to volume growth. A reconciliation of core organic sales growth to reported sales growth is provided in the attached financial tables.
“Honeywell delivered a strong fourth quarter, capping off another year of robust margin expansion, earnings growth, and cash flow,” said Honeywell Chairman and CEO Dave Cote. “We grew earnings 10% in a tough environment, representing our sixth consecutive year of double-digit earnings growth. Segment margins grew by 220 basis points driven by strong execution across the portfolio and our key process initiatives, including HOS Gold. Free Cash Flow for the full year increased 11% to $4.4 billion, which exceeded the high-end of our guidance range and included over 125% conversion in the fourth quarter. We committed to more than $6 billion in acquisitions in 2015 to bolster our Great Positions in Good Industries, reinvested $1.1 billion in our businesses through high-return capital expenditure projects, and returned more than $3.5 billion to our shareowners, including a 15% increase in our dividend. We also funded more than $160 million in new restructuring projects, including $60 million in the fourth quarter, which will put us in an even stronger position for the future.”
“We are planning conservatively in 2016 as we are expecting another year of slow global economic growth,” continued Cote. “But, we remain confident in Honeywell’s ability to outperform. We will support growth where there are opportunities to drive outperformance, be cautious in our sales planning, plan costs and spending conservatively, and continue to support the seed planting for new products, services, geographies, and process improvements that allow us to perform well now and in the future. We expect continued margin expansion and earnings outperformance in 2016 and over the long term, supported by our balanced portfolio, HOS Gold breakthrough goals, further penetration of High Growth Regions, and funded restructuring projects.”
The company also reaffirms its full-year 2016 guidance.
2016 Full-Year Guidance
| 2016 | Change | |
| Current Guidance | vs. 2015 | |
| 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
Click here to view the full release including financial tables.
