BOSTON (Reuters) - Diversified manufacturer Honeywell International Inc <HON.N> on Friday posted profit that topped Wall Street's expectations, as strong growth outside the United States overshadowed weak demand for consumer products such as thermostats and antifreeze.
By Scott Malone
BOSTON (Reuters) - Diversified manufacturer Honeywell International Inc <HON.N> on Friday posted profit that topped Wall Street's expectations, as strong growth outside the United States overshadowed weak demand for consumer products such as thermostats and antifreeze.
The company said profit rose 22 percent on strong demand from the aviation and commercial construction sectors.
"Despite pockets of softness in selected end markets, our portfolio overall remains strong," said Chairman and Chief Executive Dave Cote, on a conference call with investors.
!ADVERTISEMENT!Honeywell cited Asia and the Middle East as "leading the way" in growth and noted that two-thirds of its 10.6 percent revenue rise came outside the United States.
Shares of the world's largest maker of cockpit electronics rose 5 percent on the news, on a day that Caterpillar Inc <CAT.N> also reported better-than-expected results, citing international growth.
"In the industrial sector there are going to be some real winners related to agriculture and aerospace and Honeywell has got a pretty commanding position in that area (aerospace)," said Peter Sorrentino, senior vice president and portfolio manager at Huntington Asset Advisors, a Cincinnati-based company that manages $6.5 billion in assets and holds Honeywell shares.
PROFIT TOPS ESTIMATES
Honeywell, which also makes thermostats and other control systems for large commercial buildings, reported a first-quarter profit of $643 million, or 85 cents per diluted share, compared with $526 million, or 66 cents per share, a year earlier.
Analysts on average expected a profit of 82 cents per share, according to Reuters Estimates.
Revenue at the company came to $8.9 billion, up 10.6 percent from $8 billion a year earlier.
"The results handily beat our segment profit estimate with across the board upside growth," wrote JPMorgan analyst Stephen Tusa, in a note to clients. "Sales growth was stronger in each segment."
The fastest profit growth came at Honeywell's specialty materials arm, where earnings were up 38 percent. That unit, which makes resins, specialty films and materials for petroleum refining was boosted by pricing and productivity gains, the company said.
TIGHTENS OUTLOOK
Honeywell raised the low end of its full-year profit outlook by a nickel and expects earnings of $3.70 to $3.80 per share. The company also set a second-quarter earnings target of 92 cents to 94 cents per share on sales of about $9.2 billion.
Wall Street expects a second-quarter profit of 93 cents per share and full-year earnings of $3.76 per share.
That forecast allows for some further softening of the U.S. economy, which would be offset by growth in emerging markets, particularly in China, India and the Middle East, said Dave Anderson, Honeywell's chief financial officer.
"We expect no further recovery and in fact would expect some further softening before we see recovery," Anderson said in a phone interview. "Some potential recovery (is expected) late in the year, but it's not required to make our numbers."
Shares of Morris Township, New Jersey-based Honeywell rose 5 percent, or $3.07 to $60.27 on the New York Stock Exchange.
So far this year, Honeywell shares are down about 2 percent, less of a drop than the 8 percent slide of the Standard & Poor's capital goods industry index <.GSPIC>.
Publisher Dow Jones in February dropped Honeywell from its 30-member Dow Jones industrial average <.DJI>, the oldest and most-watched gauge of stock performance in the world.
The results stood in contrast to General Electric Co <GE.N>'s unexpected drop in quarterly profit last week, which it attributed primarily to a sharp downturn at its finance arm.
(Editing by Mark Porter and Derek Caney)
