Honeywell today announced year-over-year declines in its second-quarter sales and earnings, in keeping with its own expectations as the recession continued to muffle new business.
The automation vendor posted $7.57 billion in sales, 22% below the $9.67 billion recorded a year ago. Net income fell 37% to $460 million in the quarter ended June 30, from $728 million the year before. Product sales totaled $5.8 billion, down 26% from a year earlier, and services brought in $1.8 billion, down only 4% from a year earlier. The company found a ray of light in all this: Its cash flow from operations was $1.13 billion, vs. $1.04 billion in the 2008 second quarter, and its free cash flow — cash from operations less capital expenditures — increased to $1 billion from $853 million.
In a statement announcing the financial results, Honeywell Chairman and CEO Dave Cote pointed to the free cash flow figure as demonstration of the company’s ability to manage “working capital in these very dynamic market conditions.” He also noted a $400 million agreement to acquire RMG Group, a Germany-based provider of natural gas measuring and control products and services, which is expected to boost Honeywell’s Process Solutions business.
In the quarter, sales in the Automation and Control Solutions business, of which Process Solutions is a part, were down 17% to $3.01 billion, from $3.62 billion a year ago. The company said the favorable impact of acquisitions and divestitures partially offset lower volumes and unfavorable currency exchange rates. The segment’s profit, nevertheless, declined 11% year over year, to $346 million from $390 million.