Honeywell Q4 chemical profit dips 2% to $171m, but sales rise 12%

28 January 2011 14:51  [Source: ICIS news]

TORONTO (ICIS)--Honeywell reported a 2% decrease in 2010 fourth-quarter profit in its specialty materials and chemicals segment, to $171m (€125m) from $175m in the 2009 fourth-quarter, as margins decreased due to material cost inflation and an unfavourable product mix, the diversified US-based industrial group said on Friday.

Honeywell’s prior year 2009 fourth-quarter had benefited from “labour cost actions” while the 2010 fourth-quarter did not, the company added.

However, Honeywell’s sales of specialty materials and chemicals rose 12% year on year to $1.15bn in the three months ended 31 December 2010 as a result of higher volume due to improved global markets, the company said.

During the quarter, Honeywell’s UOP petrochemicals engineering business won a contract to provide process technology and engineering services to Brazil’s Petrobras for two new diesel refineries with a combined capacity of 900,000 bbl/day, the company added.

For the full 12 months of 2010, Honeywell’s specialty materials and chemicals segment recorded a 24% year-on-year increase in profit to $749m, on sales of $4.73bn, up 14% from full year of 2009.

Honeywell’s specialty materials and chemicals segment includes UOP, as well as a range of chemical products, including ammonium nitrate, chemical intermediates such as caprolactam, nylon 6, advanced fibres and refrigerants, among others.

In addition to specialty materials and chemicals, Honeywell is focused on aerospace, automation and control, and transportation systems.

Honeywell reported overall fourth-quarter segment profit of $1.28bn, up 4% from the same period in 2009, as sales increased 12% to $9.04bn. All segments, apart from specialty materials and chemicals, reported year-on-year increases in fourth-quarter profit.

Full-year total segment profit was $4.61bn, up 12.7% year on year compared with 2009, on sales of $33.37bn, up 8%.

CEO Dave Cote said: “The year saw progressively improved market conditions, with great execution across our businesses resulting in robust sales growth and record segment margins and cash flow.”

“Our orders are trending higher across our businesses, and with the continued improvement we’re seeing in the global economy, we’re confident in our outlook for higher revenues, and 20% plus earnings growth in 2011,” Dote added.

Honeywell said it was raising its 2011 earnings per share guidance to $3.60-3.80, from $3.50-3.70. Sales were expected in the range of $35m to $36m.

($1 = €0.73)

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By: Stefan Baumgarten
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