Honeywell net up as lower costs offset weak sales
By Stephen Manning, AP Business Writer
WASHINGTON (AP) — Honeywell International Inc.' quarterly earnings rose 2.6 percent, as lower costs offset falling sales in most of its divisions amid a worsening recession.
The diversified manufacturer of aircraft equipment, specialty chemicals and building control systems said fourth-quarter net income totaled $707 million, or 97 cents per share, compared with $689 million, or 91 cents per share, a year earlier.
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The Morristown, N.J.-based company cut its cost of products and services by about 7 percent to $6.5 billion during the quarter.
Revenue dropped 6 percent to $8.7 billion down in all but one of the company's four segments.
That included a 35 percent plunge in the auto equipment unit, and a 1 percent decline in its division that makes radars and engines for private jets and other planes. Both auto and aviation have been hit hard by the financial crisis and lower demand for new cars and corporate planes.
Only Honeywell's unit that makes fire and temperature control systems posted sales growth. However most of the 3 percent rise was driven by acquisitions and divestitures.
Analysts surveyed by Thomson Reuters expected fourth-quarter profit of 97 cents per share on revenue of $8.97 billion
Honeywell maintained its 2009 earnings forecast of $3.20 to $3.55 per share, the low end of analysts' expectations of $3.20 per share.
The company does about half of its business overseas, and noted that unfavorable exchange rates dampened sales volumes in the fourth quarter. But Honeywell's global reach has allowed it to better weather the U.S. recession and sharp declines in key domestic markets, like building construction.
"2009 will be a more challenging year," said Chief Executive Officer Dave Cote. "We are well positioned and confident in our ability to outperform in 2009 and over the long-term."
Shares of the company fell 92 cents, or 2.8 percent, to $31.75 in pre-market trading.