By Chelsey Dulaney
Honeywell International Inc. said its earnings edged up in the
fourth quarter on a lower tax expense, though the industrial
manufacturer again said it is taking a cautious outlook on the
global economy.
Results narrowly topped expectations, sending shares up 2% in
premarket trading.
Despite tepid recovery in the global economy, Honeywell has seen
growth in recent quarters. Honeywell's businesses include aviation
components, chemicals, and automation and control systems.
Last month, however, Honeywell provided a muted revenue outlook
for 2015, saying it expects only modest economic growth. Meanwhile,
the industrial conglomerate has been on the lookout for
acquisitions.
Honeywell said last year that it plans to spend $10 billion on
strategic acquisitions that would contribute about $5 billion to $8
billion in sales over the next five years.
For the fourth quarter, the company posted a profit of $956
million, or $1.20 a share, up from $947 million, or $1.19 a share
year earlier. Excluding a pension charge, earnings were $1.43 a
share.
Revenue fell 1.6% to $10.27 billion. Honeywell paid out $184
million in incentives from sales in the quarter, dragging down the
overall results.
Analysts polled by Thomson Reuters had expected per-share
earnings of $1.42 and revenue of $10.21 billion.
The company has sought to improve margins by realigning its
business to focus on its aerospace, automation and control, and its
high-tech materials operations. In the latest quarter, its segment
margin edged down to 15.9% from 16.1% a year ago. For the 2015
year, Honeywell is forecasting margins of 17.6% to 17.9%.
Product sales fell 1.4% to $8.19 billion, while service sales
were essentially flat at $2.08 billion.
The automation and control-systems business, which supplies the
commercial-construction industry, posted sales growth of 3% to
$3.85 billion. The aerospace business's sales fell 6% to $3.84
billion. Performance materials and technologies sales edged up to
$2.57 billion.
The tax expense dropped to $329 million from $475 million.
Honeywell also backed its outlook for the year.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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