Diversified manufacturing company Honeywell International, Inc. (HON: Quote) reported Tuesday a profit for the second quarter that grew from last year, reflecting strong margin expansion and sales growth.
Earnings per share for the quarter topped analysts' expectations, while quarterly sales missed their estimates. The company also raised earnings guidance for the full-year 2012, while trimming annual sales forecast.
"Honeywell had another terrific quarter, capping off a very strong first half of 2012. Despite a more challenging macro environment, particularly in Europe, Honeywell delivered strong sales conversion and double-digit earnings growth in the second quarter and executed well against our growth and productivity playbook," Chairman and CEO Dave Cote said in a statement.
The Morris Township, New Jersey-based world's largest maker of airplane cockpit controls reported net income of $902 million or $1.14 per share for the second quarter, higher than $810 million or $1.02 per share in the prior-year quarter.
On average, 20 analysts polled by Thomson Reuters expected the company to post earnings of $1.12 per share for the second quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 4 percent to $9.44 billion from $9.09 billion in the same quarter last year, but missed seventeen Wall Street analysts' consensus estimate of $9.56 billion.
Product sales for the second quarter grew to $7.48 billion from $7.15 billion in the prior-year quarter, and service sales totaled $1.96 billion, up from $1.94 billion in the year-ago quarter.
Aerospace sales were $3.03 billion, up 8 percent, and sales from automation and control solutions rose 2 percent to $3.96 billion from the prior year.
Performance materials and technologies generated sales of $1.55 billion, a growth of 10 percent from the prior-year quarter, while sales for transportation systems dropped 9 percent to $900 million from the year-ago quarter.
The company recorded "strong margin expansion", with segment margins rising 150 basis points to 15.8 percent, and operating income margin expanding 70 basis points to 13.6 percent from last year.
"As such, we're raising the low end of our 2012 guidance by $0.05, with the expectation of continued margin expansion in the second half driving our strong full-year outlook," Cote added.
Looking ahead to fiscal 2012, Honeywell raised earnings guidance to a range of $4.40 to $4.55 per share from the previously stated earnings range of $4.35 to $4.55 per share. Analysts expect the company to report earnings of $4.49 per share for fiscal 2012.
The company now anticipates full-year sales between $37.8 billion and $38.4 billion, down from the prior guidance in the range of $38.0 billion to $38.6 billion. Street is looking for full-year 2012 revenues of $38.44 billion.
HON closed Tuesday's regular trading session at $54.54, down $0.07 on a volume of 2.84 million shares.
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by RTT Staff Writer
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