Honeywell Q2 chem profit falls 9% on lower petchem licensing sales

19 July 2013 13:34  [Source: ICIS news]

HOUSTON (ICIS)--Honeywell’s second-quarter profit in its performance materials and technologies segment fell 9% year on year to $320m (€243m), mainly because of lower licensing sales in the company's UOP petrochemicals business, the US-based industrial and technologies group said on Friday.

In addition, the segment saw a decline in advanced material volumes, and the acquisition last year of a natural gas processing and treatment equipment firm had a dilutive impact on second-quarter results, Honeywell said.

The segment’s margin fell to 19.0%, from 22.6% in the 2012 second quarter.

However, sales in the performance materials and technologies segment for the three months ended 30 June rose 9% year on year to $1.68bn, driven by higher UOP petrochemical catalyst shipments and equipment sales, as well as the acquisition, the company said.

Overall, Honeywell recorded a 3% year-on-year increase in sales to $9.7bn in the second quarter.

Second-quarter net income was $1.02bn, up from $902m in the 2012 second quarter. The overall segment margin for Honeywell’s four businesses was 16.1%, up from 15.8% in the 2012 second quarter.

“Honeywell had another good quarter and a strong first half of 2013,” said chairman and CEO Dave Cote.

“Despite operating in a slow growth macro environment, we saw good organic growth in ACS's [automaton and control solutions] Energy, Safety and Security business and in Turbo Technologies, both of which continue to outgrow the key end markets in which they compete”, Cote said.

“Our long-cycle businesses, including Commercial Aerospace, Process Solutions, and UOP, also continue to perform well, benefitting from favourable macro-trends, winning new contracts, and maintaining a strong backlog, which currently stands at $15.5bn,” he said

“We remain focused on seed planting, funding cost savings initiatives across the portfolio, and remaining flexible given the continued uncertain global economic outlook,” he added.

As a result of its performance so far this year, Honeywell raised the low-end of its 2013 full-year earnings-per-share guidance by 5 cents to $4.85/share, “with the expectation of modestly improved organic growth and continued margin expansion in the second half outlook," Cote said.

In addition to performance materials and technologies, Honeywell’s business segments include aerospace, automation and control systems, and transportations systems.

($1 = €0.76)

By: Stefan Baumgarten
+1 713 525 2653

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