US Honeywell to see fall in Q1 chem segment margins - execs

24 January 2014 18:03 Source:ICIS News

HOUSTON (ICIS)--Honeywell’s performance materials and technologies (PMT) segment will see a year-over-year decline in Q1 2014 margins because of unfavourable pricing in fluorine products and lower shipments in the aromatics business, company executives said on Friday.

Shipments in the segment’s Parex aromatics business would decline on an unfavourable comparison with a very strong 2013 first quarter, CEO David Cote and chief financial officer David Anderson told analysts during Honeywell’s Q3 2013 earnings call.

The PMT segment includes Honeywell's UOP petrochemicals technologies unit and a range of chemicals, chemical intermediates, specialty and fine chemicals, electronic materials, catalysts, refrigerants, resins, plastics, fertilizers and other products.

Honeywell estimates the segment’s Q1 margin decline at about 150 basis points, the executives said. Segment sales are expected to rise by 4-6% year over year. In the 2013 first-quarter, PMT recorded sales of $1.7bn and a segment margin of 21.8%.

Earlier on Friday, Honeywell reported a 30% year-over-year increase in PMT’s Q4 segment profit, to $272m, with margins expanding by 210 basis points to 15.7%, primarily due to strong volumes and productivity.

The UOP business saw a 24% year-over-year increase in Q4 sales on the back of continued strong refining, petrochemicals and gas end markets, the executives said. UOP's organic sales growth was 17%.

Meanwhile, advanced materials sales were up 4% year over year in the fourth quarter, reflecting improved production volumes in resins and chemicals, as well as fluorine products.

By Stefan Baumgarten