Channel NewsAsia

  • 0 My Playlist

Honeywell profit beats as aerospace, energy businesses deliver

Diversified U.S. manufacturer Honeywell International Inc reported quarterly profit ahead of analysts' estimates on Friday, as sales in its aerospace and energy businesses were higher than the company's forecast.

REUTERS: Diversified U.S. manufacturer Honeywell International Inc reported quarterly profit ahead of analysts' estimates on Friday, as sales in its aerospace and energy businesses were higher than the company's forecast.

Honeywell said it was seeing improving conditions in the oil and gas industry and a resilient commercial aviation after-sales market, even as business jet deliveries remained weak.

"This is the first quarter in 2-3 years where we have seen a clean beat supported by sales upside and strong cash generation. We reiterate our view that the stock should trade well post results," Morgan Stanley analyst Nigel Coe wrote in a client note.

Honeywell's shares were up 2.8 percent at US$127.18 in premarket trading.

The company raised the low end of its 2017 earnings forecast by 5 cents to US$6.90-US$7.10 per share, and reaffirmed its 2017 organic sales growth forecast of 1-3 percent.

Analysts on average were expecting 2017 earnings of US$7.03 per share, according to Thomson Reuters I/B/E/S.

Sales in Honeywell's aerospace business, its biggest, fell 4.3 percent to US$3.55 billion, but were above the 5-7 percent decline forecast by the company.

Honeywell said sales its aerospace unit, which makes engines for aircraft made by Bombardier Inc , Textron Inc and General Dynamics Corp among others, were partly helped by growth in its commercial aviation after-sales business.

Demand for corporate jets has been subdued as companies, oil tycoons and billionaires have tightened their purse strings amid an uncertain global economy.

Sales in Honeywell's performance materials and technologies unit, which makes catalysts and adsorbents used for petroleum refining and is its third-biggest, dropped about 9 percent to US$2.07 billion, but were above the 10-12 decline forecast by the company.

A downturn in oil prices had hurt customer spending last year, affecting sales in the unit.

Net income attributable to Honeywell increased to US$1.33 billion, or US$1.71 per share, in the first quarter ended March 31, from US$1.22 billion, or US$1.56 per share, a year earlier.

Normalized for tax, Honeywell earned US$1.66 per share.

However, revenue fell to US$9.49 billion from US$9.52 billion.

Analysts on average had expected first-quarter earnings of US$1.62 per share and revenue of US$9.33 billion.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Martina D'Couto)