Honeywell Edges Estimates, Reaffirms 2013 Guidance

Industrial giant Honeywell HON reported its fourth quarter and annual earnings Friday, narrowly edging analyst expectations. The Morris Township, New Jersey firm reports fourth quarter sales of nearly $9.6 billion, topping last year's performance by one percent. For the year, the company reports sales of $37.7 billion - up three percent from 2011. With analyst consensus at $1.09 for the quarter, the firm scraped by with an EPS of $1.10. As compared to the same period last year, the company saw a 5 percent jump. Overall, Honeywell finished the year with an EPS of $4.48, topping its 2011 performance by nearly 11 percent. Mixed Results in Aerospace, Performance Materials and Tech Segments Honeywell's aerospace and performance materials and technologies segments finished with mixed results in the quarter. Aerospace sales were down one percent year-over-year, largely on a 6 percent decline in the defense and space area. Yet, profit from this segment climbed five percent. Meanwhile, the performance materials and technologies segment saw a sales increase of eight percent, while profit declined by six percent year-over-year. Strong Performance in Automation and Control Solutions Segments Sales in automation and control solutions helped boost the company to an overall successful quarter. On this front, sales were up three percent and profit rose 10 percent. This helped offset not only the mixed results in the other mentioned areas, but a weak performance in the transportation systems segment. The transportation systems segment finished with sales and profit down 11 and 20 percent, respectively. Honeywell cites “Lower sales volumes and price, unfavorable foreign exchange, and ongoing projects to drive operational improvement in the Friction Materials business” as the culprits in this regard. Honeywell Reaffirms 2013 Guidance Honeywell has reaffirmed its full-year sales and EPS guidance for 2013. The company expects sales of $39 to $39.5 billion and an EPS ranging from $4.75 to $4.95. If correct, these will represent gains of four to five percent and six to 11 percent, respectively. Market Reaction As can be expected from a $0.01 difference between its estimated and actual EPS, Honeywell has seen modest gains in trading on Friday. The stock has traded in the $67 to $68+ range over the past week and continues to do so today. As of this writing, Honeywell is up around 0.1 percent.