MORRIS TOWNSHIP, NJ — Reporting results for the first quarter that were down sharply from the year before, Honeywell announced that it plans to cut 6,500 jobs.

The company reported first-quarter earnings per share (EPS) of $0.05, including a one-time charge of $595 million for cost-reduction measures, which was a 92% decline from prior-year earnings. Excluding the one-time charge, EPS was $0.51. Analysts had been expecting earnings of $0.58 per share.

Michael R. Bonsignore, chairman and ceo of Honeywell, said the company’s first-quarter results “reflect continued weakness in some end-markets and our ongoing efforts to reduce our cost structure and increase the growth potential of core businesses as we prepare to close our pending merger with General Electric.”

Honeywell said that it’s first quarter EPS was substantially affected by a challenging economic environment. First-quarter operating margin was 11.7%, compared to 13.8% last year. Margins were affected negatively by high energy and raw material costs. Free cash flow was $111 million compared to $265 million in the first quarter of 2000, reflecting higher working capital, lower profitability, and capital outlays for a Fluorine Products expansion project. Bonsignore explained that the first-quarter charge of $595 million is primarily related to company-wide cost-reduction activities. “Because of concerns over economic softness, we moved even more aggressively in the first quarter to reduce further our cost structure,” he said. “We are optimistic that we will see the benefits of these actions in the second half of this year and much more so in 2002.”

The job cuts of approximately 6,500 employees represent about 5% of the company workforce.

Publication date: 04/30/2001