Honeywell Posts 4th Quarter Profit On Increased Sa
Morristown, NJ, Jan. 29--Honeywell International Inc. posted a fourth- quarter profit, reversing a year-earlier loss weighed down by asbestos- litigation costs.
The technology and manufacturing concern Thursday reported net income of $407 million, or 47 cents a share, compared with a year-earlier net loss of $1.47 billion, or $1.78 a share.
The latest results include an increase of $129 million in reserves for environmental and litigation matters, substantially offset by a one-time tax benefit of $108 million associated with the termination of plans to sell the company's friction materials business.
Year-earlier results included charges of $1.9 billion, or $2.30 a share, for asbestos litigation and business-impairment costs, as well as a $18 million gain on the sale of Honeywell's advanced circuits business.
Net sales rose 5.7% to $6.19 billion from $5.86 billion, driven by favorable foreign-currency translations and growth in the transportation and specialty materials segments.
The company's free cash flow for the quarter came to $1.5 billion, including $ 670 million of contributions to its pension plan, which "significantly mitigates future funding requirements," Honeywell said in a prepared statement.
As of Dec. 31, 2003, Honeywell's prepaid pension-benefit cost increased to $ 3.17 billion from $2.77 billion at Sept. 30.
Honeywell posted sales increases in three of its four operating segments. Aerospace sales remained flat at $2.36 billion, as declines in commercial aerospace offset higher sales in the defense and space sector.
Transportation systems sales jumped 20% amid double-digit growth in turbochargers, while automation and control solutions sales climbed 8%, partly as a result of acquisitions.
Sales from Honeywell's specialty materials business increased 1.5% as the sale of the company's Advanced Circuits and Metglas businesses offset 8.2% organic growth.
The company said aerospace profit rose 11% to $374 million, while automation and control solutions' profit was up 11% to $251 million. Margins in both segments rose from a year ago, as productivity gains helped offset increased investment.
"The downturn in commercial construction has slowed and our fire and security businesses continue to perform well, " said Chairman and Chief Executive David Cote in a prepared statement.
"We are also encouraged by early indications of economic recovery and are expecting year-over-year growth in revenues and margins in each business segment," Mr. Cote added.
For the full year 2003, Honeywell reported net income of $1.32 billion, or $ 1.54 a share, compared with a net loss of $220 million, or 27 cents a share, in 2002. Net sales increased 3.7% to $23.1 billion from $22.27 billion.
