Honeywell Swings to 4Q Beat as Pension Expenses Tumble

By IndustrialsFOXBusiness

Honeywell (NYSE:HON) revealed on Friday it swung to a stronger-than-expected profit in the fourth quarter as the diversified manufacturer benefited from better margins and fewer pension expenses.

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Shares of the maker of everything from aviation products to thermostats jumped almost 2% on the earnings beat.

Honeywell said it earned $251 million, or 32 cents a share, last quarter, compared with a loss of $310 million, or 40 cents a share, a year earlier.

The company benefited from lighter mark-to-market pension expenses, which fell to 78 cents a share from $1.45 a share the year before.

Excluding one-time items, the Honeywell said it earned $1.10 a share, compared with $1.05 a year earlier and a penny higher than the Street’s view of $1.09.

Revenue inched up 1.1% to $9.58 billion, narrowly topping consensus calls from analysts for $9.51 billion. Profit margins expanded to 15.6% from 15.1% the year before.

Honeywell CEO Dave Cote said his company enjoyed a “terrific performance” in 2012 despite a “weak global economy.”

“Our balanced mix of long- and short-cycle businesses and expansion in high growth regions has offset lower demand in some of our short-cycle businesses, European weakness, and foreign exchange headwinds,” Cote said in a statement.

Honeywell relieved shareholders by reaffirming its projections for 2013 non-GAAP EPS of $4.75 to $4.95 on sales of $39 billion to $39.5 billion. By comparison, Wall Street analysts are calling for EPS of $4.92 to $39.34 billion.

For the current quarter, Honeywell projected revenue would be flat to up 2%, translating to $9.3 billion to $9.5 billion. Earnings are seen rising 6% to 11% to $1.10 a share to $1.15.

Honeywell’s fourth quarter was driven by an 8% year-over-year leap in sales for performance materials and technologies to $1.55 billion and a 3% gain in automation and control solutions revenue to $4.17 billion.

On the other hand, Honeywell’s transportation systems revenue dropped 11% year-over-year to $844 million, while aerospace sales dipped 1% to $3.02 billion.

Shares of Morristown, N.J.-based Honeywell gained 1.63% to $69.35 ahead of Friday’s opening bell, putting them on track to build on their 7.5% rally so far this year. Honeywell has also jumped 19% over the past 12 months.