Honeywell Net Income Soars 18% in Q2

Honeywell International, the diversified automation technology and manufacturing software supplier, said today that fiscal second-quarter 2008 net income jumped 18% to $723 million (€455 million) on a 13% sales increase to $9.7 billion (€6.1 million). Sales growth was strongest in the company's Automation and Control Solutions unit, which posted a 19% increase.

For the quarter ended June 30, earnings per share rose to $0.96 (€0.60), compared with $0.78 (€0.49) in last year's fiscal second quarter. Encouraged by the results, Honeywell increased its sales guidance for the full year to $37.6 billion to $38.2 billion (€23.7 to €24 billion) and full-year earnings per share to $3.75 to $3.85 (€2.36 to €2.42).

"We're very pleased with our second-quarter performance and remain confident on our outlook for the year despite a tougher economic environment," said Dave Cote, chairman and chief executive, during a conference call today with financial analysts.

Senior Vice President and CFO Dave Anderson added that the future is bright in all areas of Honeywell. "We're executing well and we continue to deliver across the diversified global Honeywell portfolio," he said. "We continue to grow across all regions."

Growth in the company's Automation and Control Solutions unit was attributed to net growth from acquisitions and divestitures as well as a favorable impact from foreign exchange rates. Honeywell said sales were up 22% in the unit's Products business and 15% in its Solutions business.

During the quarter, the Automation and Control Solutions unit acquired Metrologic Solutions, a data capture and collection hardware and software company that is being folded into the Imaging & Mobility business. In addition, the Automation and Control Solutions unit's Building Solutions business signed a contract with the City of Tallahassee, FL, for $15 million (€9.4 million), and the Process Solutions business signed a deal to provide its UniSim simulation technology to Suncor Energy at its Voyager Oil Sands Upgrader Operation in Northern Alberta, Canada.

Honeywell also recorded growth in its aerospace and specialty materials businesses. Aerospace, which signed contracts with the U.S. Army and Southwest Airlines during the quarter, posted 8% growth in sales. Sales in Specialty Materials grew 19%. Transportation Systems was the only business that recorded lower numbers. Sales were up only 6% and segment profit was down 5% despite a contract with Turbo Technologies.

For the rest of fiscal 2008, Honeywell expects continued overall growth. Third-quarter sales are expected to rise 10% while fourth-quarter sales are anticipated to be slightly lower at 6%. Automation and Control Solutions is again expected to lead the pack through the third quarter, with a 17% growth rate.

"We expect double-digit earnings growth in the second half," Cote said. "We believe that our great positions in good industries and continued flawless execution on productivity initiatives will help us deliver consistent and profitable growth."