(Corrects paragraph 13 to say pension and post-retirement
payments fell to $42 million, not $32 million, during the
* Second-quarter earnings $1.28/share vs est $1.21
* Revenue $9.69 billion vs est $9.70 billion
* Company sees no financial impact from Dreamliner probe
* Gross margin up at 16.1 pct from 15.8 pct last year
By Bijoy Anandoth Koyitty
July 19 Honeywell International Inc
reported a stronger quarterly profit as it cut costs and sold
more security systems for buildings and turbochargers for cars
and trucks, nudging its shares to a lifetime high.
The 13 percent increase in profit, helped by higher margins
and a lower tax bill, beat analysts' expectations and the
company raised the lower end of its full-year profit forecast.
Honeywell, a supplier to Boeing Co, has said it
expects no material financial impact from an investigation into
whether one of its emergency beacons was the cause of a fire
aboard a parked 787 Dreamliner last week.
British aviation investigators have identified the beacon as
the likely source. The Air Accidents Investigation Branch (AAIB)
will make recommendations to the Federal Aviation Administration
(FAA) after completing a probe into the fire.
Asked about the investigation on a post-earnings conference
call, Honeywell Chief Executive David Cote said: "Wait until
they've done the job, and when you look at the AAIB and the FAA
they will do a good job sorting this whole thing through."
Honeywell, which also supplies the U.S. military, has
attempted to reduce costs and improve productivity to counter
the impact of a weak European market and sequestration-related
budget cuts by the U.S. government.
Cost reductions also came in handy for Honeywell's rival,
General Electric Co, on Friday as it beat quarterly
profit expectations by a penny.
Cote, credited with rebuilding Honeywell over the last
decade through an aggressive cost-containment strategy, said the
company would focus on revenue growth by developing new products
and expanding production capacity.
"While investing for productivity is important, it sure is a
lot easier to expand margins when sales are growing," he said.
On Friday, Honeywell reported second-quarter earnings of
$1.28 per share, topping the average analyst estimate by 7
cents, according to Thomson Reuters I/B/E/S.
The company also raised the low end of its current-year
pro-forma earnings-per-share forecast to $4.85 from $4.80. The
top end was unchanged at $4.95.
Analysts said Honeywell's second-quarter earnings beat was
driven by a lower tax rate, which added 6 cents to earnings. The
effective tax rate for the quarter fell to 23.1 percent from
26.0 percent a year earlier.
Pension and post-retirement benefit payments fell to $42
million during the second quarter from $308 million a year
earlier, while the company's operating income margin rose to
14.3 percent from 13.6 percent.
"Tax and pension helped EPS substantially, but the company
also continued to fund some additional restructuring, helping
overall earnings quality," J.P. Morgan analyst Stephen Tusa
wrote in a note to clients.
For the third quarter, the company forecast earnings of
$1.20 to $1.25 per share, in line with analysts' expectations of
$1.24 per share. It forecast revenue in a range of $9.8 billion
to $10.0 billion, also roughly in line with analysts' forecasts.
Honeywell shares edged up 0.5 percent to $83.38 on the New
York Stock Exchange, having earlier touched an all-time high of
$84.80. Its stock has risen more than 40 percent in the last 12
(Editing by Maju Samuel and Saumyadeb Chakrabarty)