On Oct. 19, Honeywell (NYSE:HON) released Q3 earnings for the period ended Sept. 30, 2006.

  • Revenues beat estimates by $178 million. Earnings per share (EPS) topped estimates by $0.02.
  • EPS increased by 22.2%, driven by both an increase in net income of 16.6% and a drop in diluted share count by 3.2%.
  • Year-to-date free cash flow increased by 34% because of both a drop in capital expenditure by 5% to $433 million and an increase in cash flow from operations by 22.9% to $1.97 billion.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$7,774

$7,952

$6,900

15.2%

Net Profit

--

$541

$464

16.6%

EPS

$0.64

$0.66

$0.54

22.2%

Diluted Shares

--

829

857

(3.2%)

Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

2005

Change*

Gross Margin

23.15%

23.16%

(0.01)

Operating Margin

10.11%

8.93%

1.18

Net Margin

6.80%

6.72%

0.08

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

2005

Change

Cash + ST Invest.

$1,415

$1,452

(2.5%)

Accounts Rec.

$5,723

$4,772

19.9%

Inventory

$3,734

$3,398

9.9%

Liabilities

Q3 2006

2005

Change

Accounts Payable

$3,222

$2,627

22.6%

Long-Term Debt

$3,909

$3,972

(1.6%)

Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$1,970

$1,603

22.9%

Capital Expenditures

$433

$456

(5%)

Free Cash Flow

$1,537

$1,147

34%

Find out why Fools always follow the money.

Related Companies:

  • General Electric (NYSE:GE)
  • Eaton Corp (NYSE:ETN)

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