Honeywell profit beats Street, boosts year view

By Scott Malone

BOSTON (BestGrowthStock) – Diversified U.S. manufacturer Honeywell International Inc (HON.N: ) boosted its full-year earnings target after reporting a first-quarter profit (Read more your timing to make a profit.) that topped Wall Street’s expectations.

Revenue rose 2.7 percent as a recovery in the global auto market sparked demand for turbochargers and a pickup in global industrial production drove up sales of control and measurement equipment for factories.

“There is clear evidence things are getting better,” Dave Cote, chief executive officer of the world’s largest maker of cockpit electronics, said on a conference call with analysts. “We’re seeing order growth across all of our businesses.”

Honeywell said on Friday that it expected 2010 profit of $2.30 to $2.45 per share, up from a prior view of $2.20 to $2.40.

The new forecast amounts to growth of 4 percent to 9 percent, factoring out the effects of a pensions-related accounting charge, Cote said.

Wall Street had expected full-year earnings of $2.42 a share, according to Thomson Reuters I/B/E/S.

While the midpoint of the new forecast is below consensus, Deutsche Bank analyst Nigel Coe pointed out that the company had described it as conservative.

“It is clear that (Honeywell) has given themselves plenty of room for maneuver,” Coe wrote in a note to clients.

The company warned sales growth may slow later this year.

“It’s still too soon to assume the early cycle upticks from the first quarter will continue at the same pace,” Chief Financial Officer Dave Anderson said on the conference call.

Honeywell shares were down 1 percent at $46.97, pulling back from an 18-month high of $47.46 hit on Thursday.


Honeywell joins a string of big U.S. manufacturers to post better-than-expected results over the past week, with United Technologies Corp (UTX.N: ), Textron Inc (TXT.N: ) and Eaton Corp (ETN.N: ) also topping Wall Street forecasts.

Results have not been uniformly good, though. Companies with heavy exposure to nonresidential construction still feel a drag on earnings. Ingersoll-Rand Plc (IR.N: ), which makes heating and cooling systems, on Friday posted a quarterly profit below Wall Street’s expectations.

Caterpillar Inc (CAT.N: ) and 3M Co (MMM.N: ) are due to report their financial results next week.


Morris Township, New Jersey-based Honeywell’s quarterly earnings fell 2.8 percent to $386 million, or 50 cents per share, from $397 million, or 54 cents per share, a year earlier. Analysts had expected 47 cents.

Revenue rose 2.7 percent to $7.78 billion.

Profit at the automation and control solutions unit — which makes products ranging from home thermostats to systems to manage large commercial buildings — was up 24 percent on a 4 percent rise in sales.

A surge in Asian demand for automotive turbochargers also boosted results.

“What we saw is very strong growth in China, very strong growth in Korea,” Anderson said in an interview.

Honeywell set a second-quarter profit (Read more your timing to make a profit.) target of 53 cents to 57 cents per share, with sales seen up 3 percent to 7 percent.

The company’s competitors include United Tech in aerospace and building control systems, Goodrich Corp (GR.N: ) in aviation and DuPont Co (DD.N: ) in specialty materials.

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(Reporting by Scott Malone; Editing by Derek Caney and Lisa Von Ahn)

Honeywell profit beats Street, boosts year view