Diversified manufacturer Honeywell Intl Inc. (HON) reported on Friday that its profits in the first quarter grew by 17 percent even though sales were essentially flat as its cost-cutting efforts paid off. The company, which makes cockpit controls, building controls, auto brakes, thermostats and more, also raised the lower end of its guidance for the year, helping to boost shares in early morning trading.
The Morris Township, New Jersey-based company reported revenues of $9.307 billion in the latest quarter, compared to $9.328 billion in the same period last year. Net income for the quarter climbed to $966 million, or $1.21 per share, versus $823 million, or $1.04 per share, in the first quarter of 2012.
The sales total was shy of Wall Street expectations of $9.44 billion, but the EPS figure easily topped analyst predictions of $1.14 per share in profits.
Helping the gains was a 1 percent increase in gross margins to 16.2 percent.
Sales were basically flat in each of Honeywell’s Aerospace and Automation Control Solutions segments. A 6 percent increase in revenue in its Performance Materials and Technologies business help offset a 4 percent drop in revenue in its Transportation Systems division, the smallest unit of the four segments. Transportation was the only segment to record lower profits with the Performance Materials and Technologies arm, which houses the company’s energy-related businesses, posting 17 percent higher profits compared to last year’s quarter to $374 million.
"Honeywell delivered better than expected quarterly earnings and margins even in a continued slow global growth environment," said Dave Cote, chairman and chief executive at Honeywell. "We had strong productivity in the quarter, and our balanced portfolio of both short- and long-cycle businesses continues to drive our outperformance,” he added.
To that end, the company boosted its outlook for the full year, saying that it now expects sales in the range of $38.8 billion to $39.3 billion. Honeywell previously guided sales between $39.0 billion and $39.5 billion. The updated outlook represents an increase between 3 percent and 4 percent compared to 2012.
Earnings per share were lifted to a range of $4.80 to $4.95. Originally, the company predicted a range of $4.75 to $4.95.
Shares of Honeywell are up by about 30 percent in the last year and hit a new 52-week high at $75.75 in March. Shares slipped from the highs back down to $71 this week, but are on the climb Friday morning, up by $2.11 per share at $73.58 one hour into the trading session on the earnings beat.
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