Honeywell Profits Beat Analysts' Estimates in Third Quarter

Honeywell International Inc. reports a third-quarter profit that beat analysts’ estimates and cut its full-year sales forecast on weaker demand for aerospace parts and falling auto production in Europe.

The Morris Township, NJ-based maker of turbochargers and cockpit controls now sees 2012 sales of as much as $37.7 billion, down from a range of $37.8 billion to $38.4 billion, according to a statement.

After increased production of commercial airplanes drove aerospace sales last quarter, Honeywell anticipates a revenue drop of as much as 2% in the division this quarter, amid weaker aftermarket sales and defense cuts. Honeywell, facing recessions in Europe and lower demand for short-cycle products in China, joins industrial peers General Electric Co. and Parker Hannifin Corp. in cutting forecasts.

“The outlook for the fourth quarter and into 2013 is pretty cautious,” Robert Stallard, an analyst with RBC Capital Markets in New York, says in a note about Honeywell. “Given the limited visibility in shorter cycle areas like Transportation we view this conservatism as warranted.”

Net income rose 10% to $950 million, or $1.20 a share, from $862 million, or $1.10, a year earlier, when Honeywell recorded a 23-cent gain from a unit sale. That beat the $1.14 average of analysts’ estimates compiled by Bloomberg.

Profit margin from business segments increased 1.1 percentage points to 15.8%. A lower tax rate of 22.7%, compared with 23.2% a year earlier, added about 6 cents to earnings per share, Stallard says.

Excerpted from Bloomberg News. Click here to read the full article.