Honeywell Profit Rises, Sales Decline
January 29 2016 - 8:00AM
Dow Jones News
Honeywell International Inc. said profit rose in its latest
quarter as lower expenses offset a dollar-driven decline in
sales.
The New Jersey-based company last month offered upbeat sales
guidance for the year, despite uncertainty in some markets, a view
it backed Friday. Honeywell makes products ranging from air
conditioners and commercial boilers to airplane-cockpit controls
and industrial gloves. As it is diversified across business lines,
the company also is diversified across geographies and generates
about half of its revenue outside the U.S.
Chief Executive Dave Cote on Friday noted a tough operating
environment and said Honeywell is expecting another year of slow
global economic growth. "We are planning conservatively in 2016,"
he said, but said he sees margin expansion this year.
The company spent $160 million on restructuring in 2015, $60
million of which it booked in the fourth quarter. An 8.8% reduction
in overhead expenses offset a drop in sales that was in part driven
by the stronger U.S. dollar.
Overall, Honeywell reported a profit of $1.19 billion, or $1.53
a share, up from $956 million, or $1.20 a share, a year earlier.
Excluding a pension-related charge, earnings per share rose to
$1.58 from $1.43.
Revenue declined 2.8% to $9.98 billion. Analysts projected $1.58
in per-share profit on $9.98 billion in sales, according to Thomson
Reuters.
In its automation and control-systems business, which supplies
the commercial-construction industry, Honeywell saw revenue decline
3.3% to $3.72 billion. Performance materials and technologies sales
dropped 12% to $2.28 billion. For the declines, Honeywell cited
adverse currency rates in addition to lower pricing power.
A 3.6% increase in the company's aerospace segment, to $3.98
billion, helped offset weakness in the other business units.
For the year, Honeywell expects to post $39.9 billion to $40.9
billion in sales, up from $38.6 billion in 2015 and bracketing the
$40.53 billion analyst estimate.
Shares in the company, down 5.4% since the start of the year
through Friday's close, were inactive premarket.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
January 29, 2016 07:45 ET (12:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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