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Honeywell Shares Jump as Profit Rises 18%

Reuters
Friday, 25 Jan 2008 | 10:35 AM ET

Diversified manufacturer Honeywell said quarterly profit rose nearly 18 percent, with sales up across all its units, sparking a 5 percent rise in the stock.

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Honeywell, the world's largest maker of cockpit electronics, said fourth-quarter earnings increased to $689 million, or 91 cents per share, from $585 million, or 72 cents a share, in the same quarter a year earlier.

Sales advanced 12 percent to $9.3 billion.

Analysts, on average, had expected earnings of 91 cents on sales of $8.9 billion, according to Reuters Estimates.

So far, Honeywell has seen no evidence in its businesses of a feared U.S. recession, but is preparing itself for a possible slowdown as a protective measure, Chief Executive Dave Cote told investors on a conference call.

"We don't really see it yet," Cote said. Referring to the recent bleak economic reports, he said, "It causes you to say, 'Let's plan conservatively. Let's plan our sales conservatively, let's plan our costs conservatively.' Even though we don't see the signs yet, we prefer to just be prepared."

Honeywell confirmed its target of double-digit percentage growth in earnings per share this year.

The company said Friday it expects first-quarter profit to rise by 21 percent to 26 percent, to 80 cents to 83 cents per share, on revenue of $8.7 billion.

Analysts, on average, look for profit of 80 cents per share on $8.55 billion in revenue, according to Reuters Estimates.

Results at Honeywell, which also makes automation systems for large commercial buildings, have been boosted by strong investment in factories, airports, power plants and other infrastructure projects in the developing world.

Aerospace sales rose 11 percent from a year earlier, helped by both commercial and defense and space businesses. Sales from its automation and control business gained 13 percent.

Honeywell reported results late Thursday night.

Officials at the Morris Township, New Jersey-based company have said they plan to focus this year on improving profit margins and cutting costs to prepare for a possible slowdown in the U.S. economy.

Honeywell shares jumped to $58.45 in premarket trading from a close of $56.20 on the New York Stock Exchange.

Honeywell shares, which last year rose about 35 percent, have slid about 9 percent through Thursday's close, a steeper decline than the 7 percent fall of the Dow Jones industrial average.

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