Honeywell Q3 Profit Beats View On Lower Expenses, But Revenues Miss

(RTTNews) - Diversified conglomerate Honeywell International Inc. (HON) said its profit for the third quarter rose 8 percent from last year, as lower revenues were more than offset by a decline in expenses and higher margins.

The top line was negatively impacted by the stronger dollar and lower raw materials pass-through pricing in Resins and Chemicals.

Earnings per share beat analysts' expectations, while revenues missed their estimates. Looking ahead, the maker of airplane cockpit controls affirmed its fiscal 2015 earnings outlook, but lowered its revenue outlook.

Honeywell has been cutting costs to boost efficiency and offset the decline in revenue in recent quarters. The latest quarter saw Honeywell acquiring the Elster Division of British engineering company Melrose Industries plc. for $5.1 billion, and the acquisition of an international aviation software company, Aviaso.

For the third-quarter, net income attributable to Honeywell rose to $1.26 billion or $1.60 per share from $1.17 billion or $1.47 per share in the year-ago period.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $1.55 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the quarter decreased 5 percent to $9.61 billion from $10.11 billion in the year-ago period, but increased 1 percent on a core organic basis. Analysts expected revenue of $9.85 billion for the quarter.

Total expenses for the quarter declined 7 percent from last year to $7.90 billion, reflecting lower selling, general and administrative expenses.

Honeywell's segment margin rose 190 basis points on new production introductions, key process initiatives and the benefit from ongoing restructuring projects. Operating income margin expanded 210 basis points from the year-ago period.

For fiscal 2015, Honeywell confirmed its outlook for earnings per share of about $6.10, but lowered its sales outlook to $38.7 billion from the prior range of $39.0 billion to $39.6 billion.

The Street expects the company to earn $6.10 per share for the year on revenues of $39.20 billion.

HON closed Thursday's trading at $98.50, up $0.24 or 0.24 percent on a volume of 6.02 million shares.