Honeywell Reports 2006 Sales Up 13 Percent

Honeywell has announced that its full-year 2006 sales increased 13 percent to $31.4 billion from $27.6 billion in 2005. Earnings per share were up 31 percent to $2.52 versus $1.92 in the prior year. Earnings per share growth was 30 percent, after taking into account income from discontinued operations (11 cents), a tax-charge for cash repatriation in 2005 (18 cents) and stock options expense in 2006 (7 cents). Cash flow from operations was up 31 percent to $3.2 billion versus $2.4 billion in 2005 and free cash flow (cash flow from operations less capital expenditures) was up 41 percent to $2.5 billion versus $1.8 billion in the prior year.

MORRIS TOWNSHIP, NJ — Honeywell has announced that its full-year 2006 sales increased 13 percent to $31.4 billion from $27.6 billion in 2005. Earnings per share were up 31 percent to $2.52 versus $1.92 in the prior year. Earnings per share growth was 30 percent, after taking into account income from discontinued operations (11 cents), a tax-charge for cash repatriation in 2005 (18 cents) and stock options expense in 2006 (7 cents). Cash flow from operations was up 31 percent to $3.2 billion versus $2.4 billion in 2005 and free cash flow (cash flow from operations less capital expenditures) was up 41 percent to $2.5 billion versus $1.8 billion in the prior year.

Fourth-quarter sales were up 14 percent to $8.3 billion. Earnings per share increased 18 percent to 72 cents versus 61 cents in the prior year fourth quarter. Earnings per share growth was 28 percent, after taking into account income from discontinued operations in the fourth quarter of 2005 (4 cents), and stock options expense in 2006 (1 cent). Cash flow from operations was up 48 percent to $1.2 billion versus $839 million in the prior year, and free cash flow was up 54 percent to $941 million versus $611 million in the fourth quarter of 2005.

"Honeywell made great progress in executing its growth strategy in 2006," said Chairman and Chief Executive Officer Dave Cote. "We reached a new financial performance threshold by surpassing $31 billion in sales, delivering 31 percent EPS growth and increasing free cash flow by 41 percent. In addition, we returned more than $2.6 billion to shareowners through share repurchases and dividends, and increased the dividend rate by 10 percent for the third consecutive year.

"We expect to build on our successful track record in 2007," continued Cote. "Despite our forecast for modest softening in global economic conditions, we believe that favorable macro-trends and demand for differentiated technologies, products and services provide opportunities for sustained growth at Honeywell. In 2007, we expect sales to be up 5 percent to approximately $33 billion, double digit earnings growth to $2.85 to 2.95 per share, and we have increased our free cash flow guidance to $2.5 to 2.7 billion (cash flow from operations of $3.3 to 3.5 billion)."

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