AlliedSignal 1st-Quarter Earnings Are Up 16% To A Record $0.52 On A 10% Increase In Sales; Operating Margin Grows To 12%.MORRIS TOWNSHIP There are several places named Morris Township in the United States:
Aerospace Continues Strong, While Engineered Materials Bounces Back Airbus To Install Enhanced Ground Proximity Warning System Ground proximity warning system (GPWS) is a system designed in 1967 by Don Bateman Chief Engineer, Flight Safety Avionics, Honeywell to alert pilots if their aircraft is in immediate danger of flying into the ground. As Standard Equipment On All New Aircraft AlliedSignal Inc. (NYSE NYSE See: New York Stock Exchange : ALD ALD abbr. adrenoleukodystrophy ALD, n.pr See adrenoleukodystrophy. ALD aldolase. ) today reported record first-quarter net income of $300 million, or $0.52 per share (on a diluted basis), a 16% increase over 1997 first-quarter net income of $259 million, or $0.45 per share. It was the company's 25th consecutive quarter of earnings growth of 14% or more. Free cash flow was $62 million, a $172-million improvement over the 1997 first quarter. "We are well on our way to achieving our 1998 goal of $500 million in free cash flow, a 25% increase over 1997," said Lawrence A. Bossidy, Chairman and Chief Executive Officer. "We are also confident that we will meet our target of 13-to-17% earnings growth for 1998." Sales in the first quarter of 1998 were $3.6 billion, 10% higher than 1997 first-quarter sales of $3.3 billion. First-quarter sales in 1998 increased by 23% for Aerospace businesses and 12% for Engineered Materials businesses. Sales of Automotive businesses were down 13% as a result of the October 1997 divestiture of the safety restraints business. Net income jumped 51% for Aerospace and was up 18% for Engineered Materials. Automotive net income declined 60%. Productivity for the first three months of 1998 improved by 5.9% Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: grew to 12.0% from 10.7% a year ago. "All ten of our major business units had higher sales in the first quarter, with seven businesses experiencing double-digit gains," said Bossidy. "Along with the continued outstanding performance of our Aerospace businesses, the first quarter results reflect a marked improvement in the sales and profitability of our Engineered Materials businesses." Bossidy said that economic conditions in Asia hurt sales of some of the company's businesses but reduced raw materials costs for others, so that the net impact on the first quarter's results was not significant. Contributing to revenue gains were robust aerospace aftermarket demand for replacement parts and repair services; sales volume gains and pricing improvements for Engineered Materials, including industrial polyester, specialty films, engineering plastics and certain specialty chemicals products; and sales of new products for the turbocharger tur·bo·charg·er n. See turbosupercharger. tur  bo·charged adj. and
flight safety markets.Net income gains resulted from increased sales of high-margin products; an improved spread between raw materials costs and selling prices in the nylon and polyester businesses; a 6% improvement in materials productivity; and the successful implementation of Six Sigma Not to be confused with Sigma 6. Six Sigma is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects.[1] A defect is defined as nonconformity of a product or service to its specifications. productivity programs. Results for the first quarter were as follows: Aerospace businesses' net income increased to a record $149 million from $99 million. Sales rose to a record $1.7 billion from $1.4 billion. Aerospace's results reflected continued strong demand for original equipment as well as aftermarket parts and services. Bossidy said the pending U.S. government mandate for enhanced flight safety equipment will dramatically benefit sales of the company's Enhanced Ground Proximity Warning System (EGPWS EGPWS Enhanced Ground-Proximity Warning System ), which was invented by AlliedSignal's avionics unit. In addition, Airbus Industrie informed the company yesterday, that it has decided to install AlliedSignal's EGPWS as standard equipment on all its new aircraft, beginning in 1999. Airbus manufactures approximately 300 aircraft per year. EGPWS provides a pilot up to 60 seconds' warning of a potential controlled flight into terrain Controlled flight into terrain (CFIT) describes an accident whereby an airworthy aircraft, under pilot control, inadvertently flies into terrain, an obstacle, or water. The term was developed by engineers at Boeing in the late 1970s. , the largest cause of aircraft fatalities. The system, which is certified by the Federal Aviation Administration Federal Aviation Administration (FAA), component of the U.S. Department of Transportation that sets standards for the air-worthiness of all civilian aircraft, inspects and licenses them, and regulates civilian and military air traffic through its air traffic control (FAA) and currently the only system available on the market, is easy to install on existing and new aircraft. The worldwide market opportunity for EGPWS is estimated at $1 billion. The company plans to expand its product offering in the flight safety arena, which in addition to EGPWS, includes systems to prevent collisions with other aircraft, predictive wind shear wind shear, a sudden, drastic change in wind direction or speed over a comparatively short distance. Most winds travel horizontally, as does most wind shear, but under certain conditions, including thunderstorms and strong frontal systems, wind shear will travel in a detection systems and flight data recorders. Aerospace Equipment Systems (AES) and Electronic & Avionics Systems (EAS (Electronic Article Surveillance) A security system for preventing theft in retail stores that uses disposable label tags or reusable hard tags attached to the merchandise. ) recorded substantially higher sales and net income, reflecting continued heavy original equipment and aftermarket demand. Notable gainers were engine controls, cabin air conditioning air conditioning, mechanical process for controlling the humidity, temperature, cleanliness, and circulation of air in buildings and rooms. Indoor air is conditioned and regulated to maintain the temperature-humidity ratio that is most comfortable and healthful. systems, safety systems, other flight navigation products and FAA-certified parts. EAS achieved record production levels, benefiting from a resolution of 1997 factory difficulties. Engines sales were up, reflecting strong demand for auxiliary power unit An auxiliary power unit (APU) is a device on a vehicle whose purpose is to provide energy for functions other than propulsion. Different types of APU are found on aircraft, as well as some large ground vehicles. (APU APU Azusa Pacific University APU Auxiliary Power Unit APU Alaska Pacific University APU Asia Pacific University (Japan) APU American Public University APU Anglia Polytechnic University (Chelmsford) ) aftermarket parts and the initial provisioning The process of determining the range and quantity of items (i.e., spares and repair parts, special tools, test equipment, and support equipment) required to support and maintain an item for an initial period of service. of AlliedSignal's new APU for the Boeing 737-Next Generation aircraft. Higher investment in new product development, including a new propulsion engine for business jet aircraft, reduced net income slightly. Engineered Materials businesses' net income was a record $127 million, compared with $108 million in the first quarter of 1997. Sales rose to a record $1.1 billion from $1.0 billion. Income gains from volume growth and larger spreads between raw materials costs and selling prices were partially offset by a decline in fluorine fluorine (fl  `ərēn, –rĭn), gaseous chemical element; symbol F; at. no. 9; at. wt. 18.998403; m.p. −219.6°C;; b.p. −188.14°C;; density 1. prices and
softness in Asian semiconductor markets.Polymers sales were higher, led by strong growth in engineering plastics and record sales for specialty films. Engineering plastics had double-digit sales growth in all of its segments, driven in part by new product applications. Specialty films sales benefited from increased manufacturing capacity as well as strong demand by the pharmaceutical packaging market for the company's Aclar(R) blister-pack product. Polymers net income more than doubled due mainly to Six Sigma capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. initiatives and significant reductions in nylon raw-materials costs. In addition, industrial polyester net income improved dramatically due to strong volume growth, a better product mix and a substantially improved price/cost spread. In March, the company announced its exit from a textile nylon product line in South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. and the European carpet fibers business; both actions are expected to enhance future margins. Sales for Specialty Chemicals grew substantially, primarily reflecting increased sales of waxes, adhesives and sealants, as well as volume gains in pharmaceutical, agricultural and fluorine products. Net income was higher, as increased sales volume and lower ethylene costs more than offset lower selling prices for fluorines and a decreased income contribution from UOP (micro OPeration) The "u" is the substitute letter for the µ symbol. See microinstruction. , the company's 50%-owned process technology joint venture. Electronic Materials sales were higher, led by volume gains in multilayer laminates, which more than compensated for lower sales of advanced microelectronic materials (AMM AMM Autorisation de Mise sur le Marche (French) AMM Autorisation de Mise sur le Marché (French: Commission of Marketing Authorization) AMM ASEAN Ministerial Meeting AMM American Metal Market ) in Asia. Lower Asian sales of AMM and a less favorable price/cost spread for laminates contributed to a decline in net income. Automotive net income declined to $21 million from $52 million in the 1997 first quarter. Sales fell to $805 million from $927 million. The decreases reflect the October 1997 divestiture of the safety restraints business. Sales and net income from Turbocharging Systems were higher, reflecting strong demand in the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. truck market and the European turbodiesel-powered passenger car market. The company demonstrated its continued technological leadership with the Garrett(R) VNT VNT Variable Nozzle Turbine VNT Variable Nozzle Turbocharger VNT Verbond Van Nederlandse Tussenpersonen (Netherlands Association of Intermediaries) VNT Voluntary National Testing VNT Virtual Network Technologies variable nozzle turbocharger, which has contributed to the growing popularity of diesel-powered cars among European consumers. Truck Brake Systems sales were substantially higher, driven by an increased rate of truck manufacturing, higher installation rates for anti-lock brakes needed to comply with government mandates and aftermarket growth. Net income was flat, reflecting the cost of consolidating plants to improve productivity. Sales of the Automotive Products Group were higher, reflecting the acquisition of Prestone and Holt Lloyd, which offset lower sales of friction materials and spark plugs. Net income was lower primarily because of lower sales of friction materials and spark plugs. AlliedSignal is an advanced technology and manufacturing company serving customers worldwide with aerospace and automotive products, chemicals, fibers, plastics and advanced materials Advanced Materials is a leading peer-reviewed materials science journal published every two weeks. Advanced Materials includes Communications, Reviews, and Feature Articles from the cutting edge of materials science, including topics in chemistry, physics, . Additional information on the company is available on the World Wide Web at http://www.alliedsignal.com/ -0- This release contains forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934, including statements about future business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets , financial performance and market conditions. Such forward-looking statements involve risks and uncertainties inherent in business forecasts. -0-
AlliedSignal Inc.
Consolidated Statement of Income (Unaudited)
(In Millions Except per Share Amounts)
Three Months
Ended March 31,
1998 1997
Net sales $ 3,646 $ 3,327
Cost of goods sold 2,809 2,605
Selling, general and administrative
expenses 398 365
Total costs and expenses 3,207 2,970
Income from operations 439 357
Equity in income of affiliated companies 34 41
Other income (expense) (1) 34
Interest and other financial charges (34) (42)
Income before taxes on income 438 390
Taxes on income 138 131
Net income $ 300 $ 259
Earnings per share of common
stock - basic $ 0.53 $ 0.46
Earnings per share of common
stock - assuming dilution $ 0.52 $ 0.45
Weighted average number of
shares outstanding - basic 564 567
Weighted average number of
shares outstanding - assuming dilution 578 582
Segment Data
Net Sales Net Income
1998 1997 1998 1997
Aerospace $1,715 $1,398 $ 149 $ 99
Engineered Materials 1,125 1,001 127 108
Automotive 805 927 21 52
Total businesses 3,645 3,326 297 259
Corporate & Unallocated 1 1 3 --
Total $3,646 $3,327 $ 300 $ 259
CONTACT: AlliedSignal Inc. Mark Greenberg (973) 455-5445 |
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