Tags: Honeywell | Forecast | Profit | Estimates

Honeywell Raises 2012 Forecast as Profit Exceeds Estimates

Friday, 20 April 2012 09:26 AM

Honeywell International Inc., the maker of digital flight controls and work boots, posted a first-quarter profit that beat analysts’ estimates, and raised its full-year forecast.

Net income rose 17 percent to $823 million, or $1.04 a share, from $705 million, or 88 cents, a year earlier, the Morris Township, New Jersey-based company said today in a statement. Analysts expected a profit of 99 cents a share, based on the average of 21 estimates compiled by Bloomberg.

Earnings for 2012 will be in a range of $4.35 to $4.55 a share, compared with a previous forecast of $4.25 to $4.50, Honeywell said. The company is benefiting from a surge in demand for passenger aircraft and energy technology for the oil and gas industry.

“We’ve seen good momentum in the U.S. and our key high growth regions, which is more than offsetting softness in Europe impacting our short-cycle businesses,” said Dave Cote, chief executive officer, in the statement.

Sales rose 7.3 percent to $9.31 billion, compared with a $9.15 billion average estimate by analysts. Honeywell narrowed its forecast for 2012 sales to $38 billion to $38.6 billion from $37.8 billion to $38.9 billion.

Honeywell rose 4.3 percent to $60.50 at 8:33 a.m. in New York in trading before the market opened, from yesterday’s close of $58.

Aerospace Sales

Aerospace sales rose 9.4 percent to $2.95 billion while sales at Performance Materials & Technologies, which produces chemicals and provides supplies and service to the oil and gas industry, jumped 19 percent to $1.62 billion.

Automation & Control Solutions, Honeywell’s largest unit, had sales of $3.79 billion, a 3.6 percent increase. Sales dropped 1.1 percent to $954 million at Transportation Systems, which sells auto turbochargers in Europe.

“Aero demand should remain strong as Honeywell is poised to outgrow its markets with new platform wins,” said Deane Dray, an analyst with Citigroup Inc. in New York, in an April 11 note. He recommends buying the shares.

The company made pension and other postretirement benefit payments of $289 million during the quarter. Honeywell has said it may make pension contributions of as much as $1 billion this year to close the gap of its underfunded plan.

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