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Honeywell International (HON) |
| Revision as of 12:09, February 17, 2012 (edit) Vale011 - Director (Talk | contribs) (→Company Overview) ← Previous diff |
Revision as of 23:14, March 18, 2012 (edit) (undo) 109.230.216.60 (Talk) (→Business Growth) Next diff → |
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| Specialty Materials makes raw materials, especially chemicals, for industrial use. While the segment is smaller than the others in terms of sales, the margins are relatively higher. | Specialty Materials makes raw materials, especially chemicals, for industrial use. While the segment is smaller than the others in terms of sales, the margins are relatively higher. | ||
| - | ==Business Growth== | + | Youre so cool! I dont suppose Ive read soetmhing like this before. So nice to find anyone with some unique ideas on this subject. realy thank you for beginning this up. this website is soetmhing that's wanted on the net, someone with just a little originality. helpful job for bringing one thing new to the internet! |
| - | ===FY 2009 (ended December 31, 2009)<ref name=09mainfinancial>[http://www.wikinvest.com/stock/Honeywell_International_%28HON%29/Filing/10-K/2010/F47088042 HON 2009 10-K "Selected Financial Data" pg. 22]</ref>=== | + | |
| - | *'''Net sales fell 15%''' to $31 billion. The company attributes the decline to a 14% decrease in sales volume and a 2% decrease due to foreign exchange. | + | |
| - | *'''Net income fell 23%''' to $2.2 billion. | + | |
| ==Trends and Forces== | ==Trends and Forces== | ||
Revision as of 23:14, March 18, 2012
Honeywell International (NYSE: HON) is an industrial conglomerate that makes airplane controls and engines, turbo chargers for car engines, industrial automation and controls systems and heating and air conditioning systems. Honeywell's $31 billion revenue[1] places it amongst the largest companies in the world. Sales in the US constitute 61% of revenue, but Honeywell's international business has been growing rapidly.
The rising price of oil has affected many of Honeywell's clients in the transportation industry. Auto-makers such as Ford and GM have been forced to close some of their plants, lowering their demand for Honeywell's products. Meanwhile, struggles in the U.S. Housing Market related to the subprime lending crisis have hurt demand in the construction industry. Demand for new heating and air conditioning systems depends upon construction levels, leaving Honeywell exposed to the downturn.
Company Overview
Honeywell is a Fortune 100 company that invents and manufactures technologies to address tough challenges linked to global macrotrends such as safety, security, and energy. With approximately 122,000 employees worldwide, including more than 19,000 engineers and scientists, we have an unrelenting focus on quality, delivery, value, and technology in everything we make and do. [2]Honeywell have continously shown leadership in hiring temporary employees from companies like Adecco SA to keep up with the demand.
Honeywell Reports Full-Year Sales Up 13% to $36.5 Billion; Proforma Earnings Up 35% to $4.05 Per Share; And Reported Earnings Per Share of $2.61
4Q11 sales were up 8% to $9.5 billion versus $8.7 billion in 4Q10 7% organic growth reflects continued strength in most end markets and the contribution of new product launches and geographic expansion.
Operating Segments[3]
The company operates through four major business segments: Aerospace Products and Services; Automation and Control Solutions; Transportation Systems; Specialty Materials.
Aerospace: 35% of Revenue
Honeywell Aerospace sells aircraft engines and other parts to aircraft manufacturers and airlines. The segment's revenue is driven by global demand for air travel - as reflected in new aircraft production, and the demand for spare parts for aircraft currently in use. Honeywell is the largest producer of cockpit electronics, and the company says its products are in virtually every type of aircraft in use.
Automation and Control: 40% of Revenue
The Automation and Control Solutions (ACS) manufactures and installs building control systems, which include Heating and Air Conditioning (HVAC) systems, security and safety systems, and more complex safety systems for industrial uses. The segment's revenues are driven by residential, commercial, and industrial construction, and capital spending on process and building automation. ACS is Honeywell's largest revenue segment, although margins, and hence net income, are lower than those in the company's aerospace segment.
Transportation Systems: 13% of Revenue
Transportation Systems produces car and truck parts, especially engines and filters, under the brands Garrett, Autolite, Prestone and Holts. The segment's revenue is driven by driven by U.S. automobile production. The company's turbo-chargers, which make automobiles more efficient by increasing the air entering engines, are in demand given the rise of oil prices - global turbo-charger sales are expected to grow at three times the rate of automobile sales.
Specialty Materials: 10% of Revenue
Specialty Materials makes raw materials, especially chemicals, for industrial use. While the segment is smaller than the others in terms of sales, the margins are relatively higher.
Youre so cool! I dont suppose Ive read soetmhing like this before. So nice to find anyone with some unique ideas on this subject. realy thank you for beginning this up. this website is soetmhing that's wanted on the net, someone with just a little originality. helpful job for bringing one thing new to the internet!
Trends and Forces
Decreased housing starts due to subprime crisis affects Automation and Control segment revenues
New construction is at its lowest level in five years due to the subprime crisis and slowing home sales. Demand for home safety products and heating/air-conditioning systems depends upon construction levels, leaving Honeywell's Automation and Control division, which produces such systems and constitutes a third of Honeywell's revenues, exposed to the downturn.
High Oil Prices affects Honeywell's Transport Systems business due to reduced demand for automobiles
The rising price of oil has affected many of Honeywell's clients in the transportation industry. Car and car parts sale in the U.S. have declined and Auto-makers such as Ford and GM have been forced to close some of their plants. Revenue from Honeywell's Transportation Systems business, which manufactures automobile parts and contributes 15% of Honeywell's revenues, remains stagnant.
Demand for airplanes and airplane parts impacts Honeywell's revenue
The Aerospace division contributed 35% of Honeywell's revenues. Demand for its products is dependent on worldwide demand for new airplanes and airplane part, which in turn is dependent on demand for airline travel. However, rising oil prices are hurting the airline industry, which already operates on very thin margins, and this is forcing major carriers to cancel flights and cut back on their number of Available Seat Miles (ASM). This, in turn, impacts their demand for new parts and new planes in the long term. In the short term, however, the Aerospace division is somewhat protected from downturns in the industry because of long-term contracts and sales to the US government.
Competition
The best way to look at Honeywell's competition is to break it up by divisions:
Aerospace
- Goodrich Corporation (GR): makes components and systems for commercial and military aircraft.
- United Technologies (UTX): manufactures helicopters and aircraft parts.
- General Electric Company (GE): industrial conglomerate with strong aircraft parts business.
- ITT Corporation (ITT): produces defense electronics for the U.S. military in addition to highly engineered products for military aircraft and gears and shock absorbers for general aviation.
Automation and Control
- General Electric Company (GE): manufactures competing safety products and heating/air-conditioning systems.
- Motorola (MOT): competes with Honeywell in safety and networking product's markets.
- Ingersoll-Rand Company (IR): manufactures competing temperature control systems and safety products.
Transportation Systems
- BorgWarner (BWA): manufactures automobile engine parts and "Powertrain" products for cars.
Specialty Materials
- Exxon Mobil (XOM): primarily an oil producer, however competes with Honeywell in providing process-based services to petrochemical companies.
- Dow Chemical Company (DOW): manufactures customized chemicals for a number of industries and direct competitor to Honeywell's specialty materials division.
GE is probably Honeywell's most significant competitor. It competes in all segments except in specialty materials. GE is the larger of the two companies. The operations of GE are much more diverse allowing it to weather various negative impacts better. However, there is no indication that the competition between GE and Honeywell is cut-throat and, historically, the two companies have co-existed pretty well.
References
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