AlliedSignal first-quarter net income is up 14% on 11% sales increase; Strong new business wins include $1.1 billion in aerospace.

MORRIS TOWNSHIP, N.J.--(BUSINESS WIRE)--April 25, 1996-- AlliedSignal Inc. (NYSE: ALD) today reported record first-quarter net income of $225 million, or $0.80 per share, a 14% increase over 1995 first-quarter net income of $198 million, or $0.70 per share. It was the company s 17th consecutive quarter of earnings growth of 14% or more.

Sales in the first quarter were a record $3.8 billion, up 11% from $3.4 billion in the first quarter last year. Sales increased 14% in Aerospace, 12% in Engineered Materials and 6% in Automotive.

Operating margin in the first quarter expanded to 9.7% from 9.2% a year ago, led by a 2.1-percentage-point increase in Engineered Materials. Productivity for the first three months of 1996 improved by 4.0%.

The company's first-quarter performance includes operating results of the hydraulic braking and anti-lock braking systems (ABS) businesses sold to Robert Bosch GmbH on April 12, 1996 for $1.5 billion in cash.

"We are off to a good start this year, as both sales and net income reached record first-quarter levels in each of our three sectors," said Lawrence A. Bossidy, Chairman and Chief Executive Officer. "We're confident we'll achieve our goal of 13-to-17% earnings growth for 1996."

"Although the economy in North America and Europe experienced only moderate expansion during the quarter," said Bossidy, "the strong performance of many of our product lines enabled the company to achieve its earnings goal." Improvements in both sales and net income were posted by nine of the company's 15 major business units: Aerospace Equipment Systems, Engines, Government Electronic Systems, Turbocharging Systems, Safety Restraint Systems, Filters and Spark Plugs, Polymers, Electronic Materials and Specialty Chemicals.

"Our programs to promote top-line growth are yielding positive results," said Bossidy. "Aerospace had an outstanding quarter in terms of new business, winning several contracts with a total potential value of $1.1 billion in revenues. Automotive and Engineered Materials also gained business from acquisitions, new product introductions and expansion outside the U.S.

In the 1996 first quarter, sales outside the U.S. accounted for 42% of the company's total. During the quarter, AlliedSignal announced a joint venture in China in automotive friction materials and a three-way joint venture to supply truck brakes in Japan. On April 23, the company announced the formation of a joint venture in China for the production of industrial polyester fiber and fabric.

Bossidy said he anticipated somewhat stronger economic growth in North America and Europe through the balance of 1996.

Results for the first quarter were as follows:

Aerospace net income increased 27% to a record $71 million from $56 million, the 11th consecutive quarterly increase. Sales rose to a record $1.3 billion from $1.1 billion. Operating margin grew to 9.5% from 9.1% in the same period a year ago.

Three of the four market segments -- commercial original equipment (OE), commercial aftermarket and military aftermarket -- had double-digit sales increases. Military OE sales were down because of the completion last year of a contract to supply engines for U.S. Army tanks.

Strength in Engines sales reflected increased revenue from aftermarket parts and repair and overhaul, as well as strong shipments of propulsion engines for regional aircraft. Aerospace Equipment Systems sales were substantially higher across all product lines, driven by aftermarket strength. Government Electronic Systems sales were higher, reflecting progress in improving output. Sales of Commercial Avionics Systems were lower, primarily because of new-product delays and the completed installation last year of mandated traffic alert and collision avoidance systems (TCAS) on regional aircraft.

Net income was higher for Engines, Aerospace Equipment Systems and Government Electronic Systems, but lower for Commercial Avionics Systems.

Among the quarter's new business wins across most Aerospace product lines were a contract to supply GE Capital Aviation Services with auxiliary power units, avionics and wheels and brakes for up to 254 Boeing 737 aircraft it is purchasing for lease to airlines. The contract is potentially worth $700 million in sales for AlliedSignal. In addition, AlliedSignal was selected by Singapore Airlines to supply air turbine starters, wheels and brakes and avionics equipment for up to 61 Boeing 777 aircraft (potential value of $250 million); by Malaysia Airlines to provide wheels and brakes and avionics for up to 17 Boeing 777 aircraft and avionics for up to 13 Boeing 747-400 aircraft ($100 million); and by Construcciones Aeronauticas S.A. to provide TPE331-12 turboprop engines for the Spanish manufacturer's new 212-400 aircraft ($54 million).

Automotive net income rose 16% to a record $72 million from $62 million, as sales grew to a record $1.5 billion from $1.4 billion. Operating margin narrowed to 8.1% from 9.0% in last year's first quarter but improved substantially over the 1995 fourth quarter's 6.0%.

Despite lower seat belt shipments due to the General Motors strike, sales were higher for Safety Restraint Systems because of higher volumes in Europe for cars equipped with AlliedSignal air bags. Sales of Turbocharging Systems were up slightly, as higher volumes of turbochargers for European diesel-powered cars offset lower shipments to the sluggish U.S. heavy truck market. Sales of Truck Brake Systems in North America declined slightly, partially offset by increased sales of aftermarket products and ABS for heavy trucks. Sales of Filters and Spark Plugs and the North American Aftermarket were higher, in part due to the new FRAM(R) DoubleGuard(TM) oil filter and SplitFireTM(a) spark plugs. European Aftermarket sales were lower because of a weak economic climate.

Net income for Safety Restraint Systems increased as it benefited from a smooth transition from startup to full production at the new air bag manufacturing facility in Colleferro, Italy. Net income was higher also for Filters and Spark Plugs, Turbocharging Systems and Truck Brake Systems and lower for the Aftermarket and hydraulic Braking Systems.

Engineered Materials net income advanced 16% to $109 million from $94 million, as sales increased to $1.0 billion from $891 million. It was the sector s first billion-dollar sales quarter, the highest net income of any quarter in its history, and the 17th consecutive quarterly net income gain. Operating margin increased to a record 15.3% from 13.2% in the first quarter of 1995.

The sales increase reflected both acquisitions and internal growth in most product lines, including industrial polyester, where plants operated at full capacity and benefited from a shift to higher value products. Worldwide sales of Specialty Chemicals doubled, mostly due to the 1995 acquisition of Riedel-de Hakn. Sales of Electronic Materials were higher, reflecting strength in both laminates and microelectronic materials. Sales of Fluorines were slightly lower because of the 1995 phase-out of CFCs in developed countries. During the quarter, the company began shipments of chlorine-free AZ-20. high-efficiency air conditioner refrigerants to Carrier Corporation under a new supply agreement. Amorphous metals had strong sales of transformer cores to electric power customers in the U.S. and India.

Net income improvement resulted from a moderation of raw materials price increases, a more profitable product mix in polymers and laminates, higher throughput at the industrial polyester plant in Longlaville, France and better manufacturing efficiency at the Geismar, Louisiana fluorines plant.

AlliedSignal is an advanced technology and manufacturing company serving customers worldwide with aerospace and automotive products, chemicals, fibers, plastics and advanced materials. (a) SplitFire is a trademark of The Old World Trading Company, Inc. -0-

AlliedSignal Inc.
Consolidated Statement of Income (Unaudited)
(Dollars in millions except per share amounts)

                               THREE MONTHS
                              ENDED MARCH 31
                              1996      1995

Net sales                     $3,778   $3,419
Cost of goods sold             3,012    2,747
Selling, general and
administrative expenses          401      358
Total costs and
 expenses                      3,413    3,105
Income from operations           365      314
Equity in income of affiliated
 companies                        27       49
Other income
 (expense)                        --      (19)
Interest and other
 financial charges               (50)     (41)
Income before taxes on income     342     303
Taxes on income                   117     105
Net income                    $   225   $ 198
Earnings per share of
 common stock (A)             $   .80   $ .70

SEGMENT DATA

                    Net Sales                 Net Income
                  1996            1995      1996      1995
Aerospace       $ 1,300         $ 1,142    $  71      $  56
Automotive        1,476           1,386       72         62
Engineered Materials 1,002          891      109         94
Total Businesses  3,778           3,419      252        212
Corporate &
 Unallocated          -               -      (27)       (14)
Total           $ 3,778         $ 3,419     $225       $198
(A) Based on weighted average number of shares outstanding during
each period: 1996, 282,850,453 shares, and 1995, 283,765,137 shares.
No dilution results from outstanding common stock equivalents.

CONTACT: Mark Greenberg

201/455-5445