Diversified manufacturing company Honeywell International, Inc. (HON: Quote) Friday reported a higher third-quarter profit, reflecting an increase in sales and improved margins. Earnings per share topped Wall Street expectations, while revenues missed view. The company also revised its earnings and revenue outlook for the full year 2012.
Looking ahead to 2013, Honeywell said it expects to deliver 'good' growth, driven by new products, geographic expansion, and traction on key initiatives.
Dave Cote, chairman and CEO of the company stated, "Our balanced mix of long- and short-cycle businesses, combined with growth in new products and continued expansion in high growth regions, offset European weakness, lower demand for products in some of our short-cycle businesses in China and the U.S., and foreign exchange headwinds in the quarter."
Aerospace segment sales increased 4 percent, and profit for the quarter was up 9 percent to $582 million. Automation and Control Solutions sakes were flat with last year. In Performance Materials and Technologies segment, sales were up 1 percent, while segment margins increased 130 bps to 18.6 percent, primarily due to higher sales at UOP. Transportation Systems sales dropped 10 percent.
In the third quarter, net income attributable to the company increased to $950 million from $862 million in the previous year. On a per share basis, earnings were $1.20, higher than $1.10 per share reported last year.
On average, 21 analysts polled by Thomson Reuters expected the company to earn $1.14 per share for the quarter. Analysts' estimates typically exclude special items.
Operating income margin improved 360 basis points to 13.9 percent, as total costs and expenses dropped to $6.81 billion from $7.03 billion in the prior year. .
Net sales for the quarter grew slightly to $9.34 billion from $9.30 billion in the same quarter last year, but came below analysts' estimate of $9.51 billion. The company said its organic sales growth was 2 percent.
For the full-year 2012, the company now expects earnings per share to be in the range of $4.45 to $4.50, compared to prior guidance of $4.40 to $4.55.
Sales are anticipated in the range of $37.5 billion to $37.7 billion, compared to prior forecast of $37.8 billion to $38.4 billion. Analysts currently expect the company to report full year earnings of $4.50 per share, on revenue of $38.10 billion.
Operating income margin is expected to be 13.5 to 13.7 percent, up 150 to 170 basis points from the earlier outlook.
HON closed Thursday's regular trading at $61.07 on the NYSE.
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by RTT Staff Writer
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