MORRIS TOWNSHIP, N.J. (Honeywell Aerospace) - Honeywell today announced first-quarter 2006 sales of $7.2 billion, up 12% over the prior year. Earnings per share were $0.52, a 24% increase versus 2005. Cash flow from operations was $239 million and free cash flow (cash flow from operations less capital expenditures) was $117 million.
“We also completed the acquisition of First Technology plc at the end of the quarter and expect to complete the divestiture of the non-core First Technology Safety & Analysis business in the second quarter,” continued Cote. “Together with last year’s acquisition of Zellweger Analytics, First Technology positions our Automation and Control Solutions business as a global leader in gas sensing and detection technologies.”
First-Quarter Segment Highlights
- Sales were up 5% compared with the first quarter of 2005, with 10% growth in commercial sales partially offset by a 1% reduction in Defense and Space sales.
- Segment margins were 16.7% compared with 15.1% a year ago, due to volume growth and realization of the expected savings from the 2005 Aerospace reorganization, partially offset by inflation.
- Airbus selected Honeywell’s HGT1500 auxiliary power unit (APU) for its new long-range, wide-body A350 aircraft. The agreement is valued at an estimated $4 billion in original equipment and aftermarket revenue for Honeywell over the life of the platform.
- Honeywell received U.S. Federal Aviation Administration certification for its Nitrogen Generation System (NGS) for Boeing’s 737 airplanes. NGS reduces the risk of flammability of an aircraft fuel tank by injecting nitrogen-enriched air into the tank. The certification came less than two months after the company received similar approval for the NGS on Boeing 747 airplanes.
- Honeywell was selected by the Netherlands Ministry of Defense to provide a fully-integrated avionics cockpit for Boeing’s CH-47F (NL) Chinook Helicopter fleet valued at an estimated $60 million over the life of the contract.
Automation and Control Solutions
- Sales were up 19%, compared with the first quarter of 2005, driven by the impact of acquisitions of 15% and organic sales growth of 4%, or 6% before the negative impact of foreign exchange.
- Segment margins were 9.3% compared with 10.1% a year ago, due to planned ERP implementation costs and a charge related to liquidity issues being experienced by a Honeywell Building Solutions customer, which more than offset volume growth and productivity gains.
- Sensing and Control won a $4.1 million project with BAE Systems to provide position sensing devices for more than 440 new M2A3 Bradley Fighting Vehicles used by the
- U.S. military.
- Honeywell agreed to acquire Gardiner Groupe Europe, a leading distributor of CCTV systems, fire alarm, intrusion alarm, access control, public address and integrated systems. The acquisition, which is expected to close in the second quarter, will significantly enhance Honeywell Security Group’s distribution footprint in Europe with more than 77 branch locations in 10 European countries.
- Sales were down 5%, compared with the first quarter of 2005, due to the negative impact of foreign exchange of 4%, an anticipated decline in European Turbo Technologies sales and the 2005 exit of the Friction Materials OE business in North America.
- Segment margins were 13.0%, compared to 13.4% a year ago, due to planned unfavorable mix and higher raw material costs, partially offset by productivity gains, which include savings from previous restructuring actions.
- Honeywell Turbo Technologies won several gas and diesel turbo contracts with expected total revenues of more than $200 million annually through their maturity. Additionally, Honeywell Turbo products are being featured on Ford’s new gas turbo Territory SUV.
- Honeywell’s Consumer Products Group expanded its presence in the high-performance automotive aftermarket segment with the introduction of FRAM Boost™, a cold air intake system that increases engine torque and horsepower.
- Sales were up 44% compared with the first quarter of 2005, driven by the net impact of acquisitions and divestitures of 37% and organic sales growth of 7%.
- Segment margins were 14.1% compared with 7.4% a year ago, due to the positive net impact of acquisitions and divestitures and price increases more than offsetting higher raw material costs.
- UOP LLC announced an alliance for hydroprocessing technology with Albemarle Corp. focused on the petroleum refining industry. The alliance will offer a wide range of hydroprocessing technologies, catalysts and services to help refiners meet demand for refined products and ultra-low-sulfur fuels.
- Fluorine Products announced a patented developmental refrigerant for automotive air conditioning applications that will meet 2011 European Union environmental standards for reducing use of global warming substances.
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