Higher turbocharger sales boost Honeywell results
(Reuters) - Honeywell International Inc (HON.N) raised the lower end of its 2014 profit forecast range and reported a better-than-expected quarterly profit, helped by higher sales of its turbochargers that help make automobiles more fuel-efficient.
New regulations in Europe, China and the United States have boosted demand for turbochargers as automakers aim to get more power out of engines using less fuel.
The company, which has been controlling costs by restructuring its businesses, said it expects margins to expand further in the second half of 2014.
Honeywell said margins rose to 16.7 percent in the second quarter from 16.1 percent a year earlier.
The company reported a "clean quarter, which looks increasingly positive in a stubbornly inconsistent and sluggish environment," JP Morgan analyst Stephen Tusa wrote in a note.
Honeywell lifted the lower end of its 2014 profit forecast range to $5.45 per share from $5.40. It maintained the top end at $5.55.
Analysts on average were expecting full-year earnings of $5.54 per share, according to Thomson Reuters I/B/E/S.
The company adjusted its full-year revenue forecast to reflect the sale in July of its Friction Materials unit, which makes disc brake pads and braking system components.
Honeywell said profit in its transportation systems unit, which makes turbochargers, jumped 33 percent in the second quarter ended June 30.
The company said on Monday it would merge the transportation systems business, its smallest but fastest growing, with its aerospace division to cut costs.
Net income attributable to Honeywell rose to $1.10 billion, or $1.38 per share, from $1.02 billion, or $1.28 per share, a year earlier.
Net sales rose 5.8 percent to $10.25 billion.
Analysts on average had expected earnings of $1.36 per share on revenue of $10.19 billion.
Honeywell's shares were up about 1 percent at $95.86 on Friday morning on the New York Stock Exchange. The stock had gained about 4 percent so far this year through Thursday, trailing the S&P 500 index's .SPX 6 percent rise.
(Reporting by Sagarika Jaisinghani in Bangalore; Editing by Saumyadeb Chakrabarty)
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