Honeywell International Beats

Honeywell International Inc. (HON - Analyst Report) reported third quarter 2009 sales of $7.7 billion versus $9.3 billion in the third quarter last year. 

Earnings were 80 cents per share compared to 97 cents per share in the third quarter of 2008. This was higher than the Zacks Consensus Estimate of 72 cents. 

Aerospace sales were down 16% compared with the third quarter of 2008, resulting from lower volumes in Commercial Aerospace, partially offset by higher sales of original equipment for military platforms, logistics services and advanced aircraft modifications, and upgrades. 

Automation & Control Solutions sales were down 14%, compared with the third quarter of 2008, resulting from slower economic growth and the unfavorable impact of foreign exchange, partially offset by continued growth in emerging regions, new product introductions and net favorable impact from acquisitions and divestitures. 

Transportation Systems sales were down 24% compared with the third quarter of 2008 due to lower volumes, primarily as a result of lower sales to global automotive original equipment (OE) customers and the negative impact of foreign exchange. This was partially offset by new platform launches with automotive OE customers and share gains in the automotive aftermarket retail channel. 

Specialty Materials sales were down 23% compared with the third quarter of 2008, resulting from lower volumes and the unfavorable impact of passing through raw material price declines at their Resins and Chemicals business, partially offset by higher petrochemical catalyst sales and traction on green initiatives at UOP. 

Cash flow from operations was $1,148 million versus $769 million last year, and free cash flow (cash flow from operations less capital expenditures) was $1,022 million versus $556 million in the third quarter of 2008. 

At the end of the quarter, cash and equivalents stood at $2.6 billion with long-term debt at $6.2 billion and shareowners’ equity at $9.6 billion. 

Honeywell estimates 2009 sales of approximately $31 billion, earnings per share of $2.85 and free cash flow of $3 billion. The corresponding Zacks Consensus Estimate stands at $2.76 per share. 

Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide. The company operates in four segments: Aerospace, Automation and Control Solutions, Specialty Materials, and Transportation Systems. Honeywell International was founded in 1920 and is headquartered in Morris Township, New Jersey. Major competitors include Goodrich Corporation (GR - Analyst Report), Johnson Controls Inc (JCI - Analyst Report) and United Technologies Corporation (UTX - Analyst Report). 

We currently have a Neutral recommendation on HON.

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