MOUNT LAUREL, N.J. (AP) - Aerospace and high-tech manufacturer Honeywell International Inc. reported a 22 percent increase in first-quarter profits Wednesday, citing strong performances across its divisions.
For the three months ended March 31, Honeywell had profits of $359 million or 42 cents per share, up from $295 million or 34 cents per share for the same period in 2004.
The earnings per share exceeded by 2 cents the projection of 17 analysts surveyed by Thomson Financial. The company also raised its revenue expectations for the year, but left its profit projections unchanged.
Honeywell shares fell $1.07, or 2.9 percent, to close at $35.43 in Wednesday trading on the New York Stock Exchange. The stock has traded in a 52-week range of $31.85 to $39.50.
Brian K. Langenberg, who follows Honeywell for Langenberg & Co., attributed the stock decline to a rough day for industrial firms rather than bad news from Honeywell.
But Mary Anne Sudol, an analyst with Caris & Company said she believed investors may have downgraded the stock because Honeywell refused to raise profit forecasts for the year.
Quarterly sales were $6.45 billion, up 4.4 percent from $6.18 billion a year ago.
The company reported increased sales in its aerospace, automation and control and transportation units. The biggest gains came in the aerospace division, where sales were $2.5 billion - up 8.7 percent from the $2.3 billion in sales in the first quarter last year. The company said it sold more plane parts to both the commercial and defense sectors.
Increased commercial flights around the world and the United States' continued military action in Iraq and Afghanistan is driving the sales of plane parts, company officials told analysts during a morning conference call.
David J. Anderson, the company's chief financial officer, said in an interview that airlines have been ordering more new planes this year, and that Honeywell should benefit by selling parts for them.
Only the specialty materials division had lower sales than in the first quarter of 2004 - but profits were higher in that unit as well. The company said revenue in that area fell because it sold its polyester business.
Honeywell also announced that on March 31, it completed its purchase of Novar PLC, a British industrial holding company.
Anderson said Honeywell intends to keep Novar's building-security and fire-alarm business but sell its check-printing and aluminum businesses within the next year.
The company has $4 billion in cash and is looking to buy more businesses soon, he said.
Anderson said the company was raising its revenue expectations for the year to 7 to 9 percent. Previously, the company had said sales would increase only by 3 to 5 percent.
But the company's profit projections for the year were unchanged, remaining $1.95 to $2.05 per share for the year. Anderson said he expects profits to be at the higher end of that range.