What Helped Honeywell’s Safety and Productivity Solutions Revenue



Safety and Productivity Solutions in 4Q17

Honeywell International’s (HON) Safety and Productivity Solutions (or SPS) segment is its smallest revenue contributor, accounting for 13.6% of its total revenue in 4Q17. In 4Q16, it accounted for 12.9% of its total revenue. Between 4Q16 and 4Q17, the segment’s revenue rose 14.0% to $1.5 billion from $1.3 billion.

The segment’s revenue growth was primarily driven by double-digit growth from Intelligrated. Higher volumes were seen in industrial safety products, sensing controls, and voice-enabled workflow solutions. The segment reported 12% organic growth and 2% growth from favorable currency translations due to continued weakness in the US dollar.

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Net income and margin

Between 4Q16 and 4Q17, the SPS segment’s net income rose 24.9% to $231.0 million from $185.0 million. Higher volumes and productivity led to the segment’s margin expanding by 150 basis points, to 15.7% from 14.3%.


The SPS segment’s revenue growth is expected to be primarily driven by continued Intelligrated growth. Honeywell’s acquisition of SCAME Sistemi, a leading provider of fire and gas management systems, will also add to its revenue.

Investors seeking indirect exposure to Honeywell could consider the iShares Global Industrials ETF (EXI), which has invested 2.5% of its portfolio in Honeywell. The fund’s other holdings include 3M (MMM), General Electric (GE), and Boeing (BA), which had weights of 3.1%, 2.9%, and 3.9%, respectively, as of January 29, 2018.


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