Diversified high-tech manufacturer Honeywell International Inc. said Friday its fourth-quarter profit rose 14 percent, putting the company in a strong position to buy other firms.
Net income for the Morris Township-based company grew to $585 million (euro453.45 million), or 72 cents per share, for the three months ended Dec. 31 from $514 million (euro398.42 million), or 61 cents per share, in the year-ago period.
Revenue also rose 14 percent to $8.28 billion (euro6.42 billion) from $7.28 billion (euro5.64 billion), led by automation and control services sales that rose 18 percent to $3.05 billion (euro2.36 billion).
The profits matched the expectations of analysts surveyed by Thomson Financial, while revenue came in ahead of forecasts for $8.1 billion (euro6.28 billion).
For the year, profit was $2.08 billion (euro1.61 billion), or $2.52 (euro1.95) per share, up from $1.64 billion (euro1.27 billion), or $1.92 (euro1.49) per share, in 2005. Revenue was $31.3 billion (euro24.26 billion), up 13 percent from $27.7 billion (euro21.47 billion) a year earlier.
While aerospace and the automation businesses led the way in the fourth quarter, the company's other main divisions _ specialty materials and transportation systems _ also saw sales growth for both the fourth quarter and the year.
The company said the growth would continue, projecting sales for 2007 to be about $33 billion (euro25.58 billion), or up 5 percent and earnings to be $2.85 (euro2.21) to $2.95 (euro2.29) per share for the year.
Analysts were expecting 2007 earnings per share of $2.93 (euro2.27) on revenue of $32.6 billion (euro25.27 billion).
"We expect to build on our successful track record in 2007," said Chairman and Chief Executive Dave Cote. "Despite our forecast for modest softening in global economic conditions, we believe that favorable macro-trends and demand for differentiated technologies, products and services provide opportunities for sustained growth at Honeywell."
But with a company forecast suggesting earnings could come in below current Wall Street estimates, Honeywell shares fell 25 cents to $43.95 in early afternoon trading on the New York Stock Exchange. The stock price was still not far off the 52-week high of $45.99, set on Jan. 11.
Paul Nisbet, who follows the Honeywell for JSA Research Inc., said the rough beginning of trading on the stock exchange had more to do with a trading mood that saw most stocks falling than anything in Honeywell's report.
He said some acquisitions for the company seemed imminent.
"They certainly talk like they're getting ready to have a few, they said the pipeline is full," Nisbet said. "Something is going to start happening soon."
Cote also told analysts on a conference call Friday that free cash flow of $2.5 (euro1.94) to $2.7 billion (euro2.09 billion) in 2007 could position the company to buy other businesses.
"If I take a look at the Honeywell portfolio, most of it can handle an acquisition," he said.
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