US Honeywell Q2 chems net profit up 8% to $475m on higher volumes

18 July 2014 13:24 Source:ICIS News

LONDON (ICIS)--Honeywell reported second quarter profits from its performance materials and technologies division of $475m, up 8% year on year and sales of $2.6bn, up 6%, for the same period on the back of higher sales volumes, the US industrial group said on Friday.

Sales also benefited from higher gas processing activities. Honeywell said, however, profits at its chemicals division could have grown at a faster rate had it not been for “continued investments for growth”, an “unfavourable” catalysts shipment mix compared to 2013 and “headwinds” in the prices at the Resins & Chemicals segment.

The catalysts business is one of Honeywell’s main points of focus for the coming years, and the company announced in April additional capacity to help it fulfil a $2.4bn order backlog for its UOP technologies.

Overall, the US industrial group saw sales in the second quarter of 2014 increase 6% to $10.25bn and improved its operating income margin by 110 basis points to 15.4%. The margin in chemicals increased 30 basis points in the quarter to 18.0%.

The Aerospace division registered flat sales at $2.99bn while the Automation and Control Solutions division managed to increase them by 10% to $3.61bn. Transportation Systems, on the other hand, increased its sales by 8% to $1.02bn.

Earnings per share (EPS) rose 8% to $1.38.

"Our short-cycle businesses, particularly Energy, Safety and Security, and Turbo Technologies, are benefiting from improving end markets, new product introductions, and geographic expansion, while our long-cycle businesses are growing robust backlogs supported by favourable macro trends and strong win rates,” said Honeywell’s CEO Dave Cote.

“As a result of our first half performance, we are raising the low end of our 2014 proforma EPS guidance by $0.05 with the expectation of improved organic growth and continued margin expansion in the second half of the year," he added.

By Jonathan Lopez