Reuters: Global Markets: Honeywell profit up 11.7 percent, tops Wall Street view

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Honeywell profit up 11.7 percent, tops Wall Street view Jul 18th 2012, 14:19 A view of the corporate sign outside the Honeywell International Automation and Control Solutions manufacturing plant in Golden Valley, Minnesota, January 28, 2010. Credit: Reuters/ Eric Miller By Scott Malone Wed Jul 18, 2012 10:19am EDT (Reuters) - Honeywell International Inc (HON.N) posted an 11.7 percent rise in quarterly profit, topping Wall Street forecasts, as strong U.S. demand for building-control systems and specialty chemicals offset weakness in Europe. Its shares rose 5 percent to $57.26 in early New York Stock Exchange trading. The company on Wednesday also raised the low end of its full-year profit forecast by 5 cents, and now anticipates 2012 earnings of $4.40 to $4.55 per share, representing growth of 9 percent to 12 percent. It said it expected to push profit margins higher this year, which would offset lower-than-previously forecast sales. "For 2012 and 2013 we have focused on margin expansion as key to earnings growth, to leverage sales in a tough macroeconomic environment," Chief Executive David Cote told analysts on a conference call. The company is in the midst of a few restructuring projects that will cut costs by about $125 million next year, Cote said, adding, "we'll continue to be cautious about adding people." As of Tuesday's close Honeywell's shares were little changed for the year, lagging an 8 percent rise in the Standard & Poor's 500 index .SPX. Second-quarter earnings were $905 million, or $1.14 per share, compared with $810 million, or $1.02 per share, a year earlier. Analysts' average forecast was $1.11 per share, according to Thomson Reuters I/B/E/S. Revenue rose 3.8 percent to $9.44 billion, below the $9.56 billion analysts had expected. "Honeywell clearly is not immune to macro headwinds and evidence of that was apparent in second-quarter top line," Vertical Research Partners analyst Jeffrey Sprague wrote in a note to clients, adding that the company is better positioned than its peers to boost its margins due to its practice of steadily tweaking its operations to make them more efficient. The company lowered its full-year sales forecast by $200 million to a range of $37.8 billion to $38.4 billion. "The macroeconomic landscape is uncertain, and that's at best," Cote said. Honeywell is on the leading edge of a wave of earnings reports from top U.S. manufacturers, with United Technologies Corp (UTX.N), General Electric Co (GE.N), Danaher Corp (DHR.N) and Ingersoll-Rand Co (IR.N) due to release results this week. (Reporting by Scott Malone in Boston; Editing by John Wallace and Maureen Bavdek) Link this Share this Digg this Email Reprints

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