MORRIS TOWNSHIP, N.J. - For the third quarter of 2014, Honeywell reported sales of $10.1 billion, up five percent from sales of $9.6 billion in the third quarter of 2013. Net income for the quarter was $1.0 billion compared to $1.2 billion in the same period a year ago.
"The continued integration and maturation of the Honeywell Operating System throughout our global portfolio is helping to drive sales, margin, earnings, and cash flow higher, and plenty of runway remains," said Honeywell Chairman and CEO Dave Cote. "We are committed to our ongoing seed planting investments to bolster our great positions in good industries and continuous process improvements to mitigate ongoing global macroeconomic uncertainties. We're confident that Honeywell will continue to outperform now and over the long-term driven by a relentless focus on new products and technologies, continued penetration of high-growth regions, and sustained implementation of our key process initiatives."
INDUSTRY SEGMENTS
Aerospace
Sales for the third quarter were flat at $3.9 billion on a reported basis due to the Friction Materials divestiture. Commercial OE sales were up 5 percent reflecting continued strong OE build rates, as well as an increase in Business and General Aviation (BGA) engine shipments. Commercial Aftermarket sales increased 2 percent driven by strong Air Transport and Regional (ATR) spares growth, partially offset by a decline in RMU (Retrofit, Modifications, and Upgrades) sales in BGA and lower repair and overhaul activities. Defense & Space sales grew 3 percent as a result of strong international growth and stabilization in U.S. government sales. Transportation Systems sales were down (10 percent) reported, primarily reflecting the Friction Materials divestiture, and up 4 percent organically driven by new platform launches, higher turbo gas penetration globally, and increased commercial vehicle demand in Europe, partially offset by moderating EU light vehicle production. Segment profit was up 8 percent to $583 million (2013: $523 million), and segment margins expanded 150 bps to 20.3 percent, driven by productivity net of inflation, commercial excellence, and the favorable impact of the Friction Materials divestiture.
Automation and Control Solutions
Sales were up 9 percent to $3.7 billion, compared with $3.4 billion in the third quarter of 2013, primarily driven by the favorable impact of the Intermec acquisition and strong organic growth across Energy, Safety, and Security (ESS), particularly in Scanning & Mobility, Industrial Safety, Security, and Fire. Building Solutions & Distribution (BSD) saw continued strength in the Americas Distribution business.
Segment profit was up 11 percent to $583 million (2013: $523 million) and segment margins expanded 40 bps to 15.9 percent driven by higher volume, commercial excellence, and productivity net of inflation, partially offset by the dilutive impact of the Intermec acquisition.
Performance Materials and Technologies
Sales were up 7 percent to $2.54 billion compared with $2.38 billion the third quarter of 2013, driven by UOP catalyst and gas processing growth, an acceleration of sales growth in Process Solutions, and higher sales across Advanced Materials, particularly Fluorine Products.
Segment profit was up 8 percent to $444 million (2013: $413 million) and segment margins increased 20 bps to 17.5 percent, driven by higher volume and productivity net of inflation, partially offset by price/raws headwinds in Resins & Chemicals and continued investments for growth.
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