HON Honeywell International Inc

By Lisa Beilfuss and Ted Mann 

Honeywell International Inc. said profit rose 24% in its latest quarter as the conglomerate reined in expenses to offset a decline in sales driven by the stronger dollar.

The New Jersey-based company last month offered upbeat sales forecasts for the year, despite emerging concerns about global growth, a view it backed Friday. Honeywell makes products ranging from thermostats and turbochargers to airplane-cockpit controls and industrial gloves. As it is diversified across business lines, the company has also spread itself widely across geographies and now 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," Mr. Cote said, but added he sees margin expansion this year.

Honeywell has been cutting costs to maintain profitability after the stronger dollar pushed sales down 3%. Chief Financial Officer Tom Szlosek said in an interview the company is squeezing more efficiency out of its 250 manufacturing plants, and in some cases closing and combining facilities to improve margins, moves that reduced overhead expenses by 8.8%.

Nonetheless, Honeywell is maintaining spending levels on research and development at a range of 6% to 7% of sales, Mr. Szlosek said, and investing in plant expansions to boost capacity in businesses where orders have been strong, such as for products and services used in the oil-refining and petrochemical industry.

Honeywell customers tend to be downstream, like oil refineries, and are less affected by the long-term slump in crude-oil prices because their facilities keep running even as some oil exploration and production operations shut down. "Those plants have to run and that's where our customers are," Mr. Szlosek said.

Honeywell is "heading into the peak year" in a program of capital investment, and is planning $1.1 billion in capital investment in 2016, up from a typical annual amount of around $800 million.

Overall, Honeywell reported a profit of $1.19 billion, up from $956 million. Revenue declined 2.8% to $9.98 billion. All of Honeywell's three divisions reported sales declines in 2015, while profit in all three rose. For the year, Honeywell forecasts sales of $39.9 billion to $40.9 billion, up from $38.6 billion in 2015.

Shares in the company, down 5.4% since the start of the year through Friday's close, and were up 4% in recent trading.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com and Ted Mann at ted.mann@wsj.com

(END) Dow Jones Newswires

January 29, 2016 14:57 ET (19:57 GMT)

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