Honeywell (Morris Township, NJ) announced that its first-quarter ongoing earnings per share (EPS) were $0.51, excluding $595 million in repositioning and other charges. Reported first quarter EPS was $0.05. The first-quarter EPS was substantially affected by the current economic environment and continued high energy and raw material costs. Other factors included income declines in units the company had planned to divest but instead retained due to pooling of interest restrictions. First-quarter EPS was also negatively affected by the discontinuation of strategic portfolio and licensing activities.
Sales in the first quarter were flat before currency translation at $5.9 billion. Sales growth was seen in turbochargers, fire and security, aerospace avionics, advanced circuits and sensing and control products. Short-to-medium-term weaknesses in some end-markets led to lower sales in commercial vehicle braking systems, electronic materials, friction materials, automotive consumer products and industrial automation and control.
First-quarter operating margin was 11.7 percent, compared to 13.8 percent in the first quarter of the prior year. Free cash flow was $111 million, compared to $265 million in the first quarter of 2000.
Honeywell chairman and CEO Michael R. Bonsignore said that the company's first-quarter financial results "reflect continued weakness in some end-markets and our ongoing efforts to reduce our cost structure and increase the growth potential of core business as we prepare to close our pending merger with General Electric." He added, "Honeywell has not been immune to the current economic downturn. Some of our businesses are more sensitive to end-market cycles, while others are thriving. Most importantly for us, our core business portfolio has remained resilient despite the difficult operating environment."