Honeywell International Inc reported a better-than-expected increase in quarterly profit as the maker of aircraft parts and climate control systems reined in costs amid declining sales. Honeywell's shares rose as much as 3 percent in early trading after the company also raised the low end of its full-year earnings forecast. The company, which counts Boeing Co and Bombardier Inc among its customers, has cut jobs and sold or merged businesses to reduce costs.
Honeywell's expenses dropped about 7 percent in the second quarter ended June 30, lifting operating income margins to 17.6 percent. The company said it expects margins to expand further in the second half of 2015. Honeywell said it expects full-year earnings of $6.05-$6.15 per share, compared with its previous forecast of $6.00-$6.15. Analysts on average were expecting earnings of $6.09 per share, according to Thomson Reuters I/B/E/S.
Excluding the impact of the dollar, sales in the company's aerospace business - its largest - rose 3 percent in the second quarter ended June 30, while sales in its automation and controls business rose 4 percent. Reported sales fell 5 percent in the aerospace business and 1 percent in the automation and controls unit. Net income attributable to Honeywell rose to $1.20 billion, or $1.51 per share, from $1.10 billion, or $1.38 per share, a year earlier. Larger rival General Electric Co raised its 2015 outlook for its industrial manufacturing businesses and reported a 5 percent increase in its quarterly industrial profits on Friday. Revenue fell about 5 percent - its third straight quarter of decline - to $9.78 billion. The company gets about 40 percent of its sales from outside the United States.
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