Honeywell 2014 sales forecast falls short of estimates
Honeywell International Inc, a maker of cockpit electronics and climate-control systems, forecast slightly lower 2014 sales than analysts had expected, citing a sluggish recovery in the global economy.
Global economic growth of slightly less than 1 percent expected next year was "not as robust as we would like," Chief Financial Officer David Anderson said on a conference call with analysts.
New Jersey-based Honeywell, which makes products ranging from thermostats and brake pads to aerospace and medical components, derived more than half its $37.66 billion in revenue last year from outside the UnitedStates.
Chief Executive David Cote has been an advocate of a reduction in the U.S. corporate tax rate as a way to make the country more competitive in emerging markets.
Honeywell on Tuesday forecast 2014 sales of $40.3 billion to $40.7 billion. Analysts on average had expected $41.1 billion, according to Thomson Reuters I/B/E/S.
Although the forecast missed estimates, Honeywell was generally upbeat about the year ahead. Sales, profit margins, earnings per share and free cash flow are expected to increase in 2014, Cote said in a statement.
The company forecast earnings of $5.35 to $5.55 per share for 2014. The upper end of the range matches the average analyst estimate.
Honeywell maintained its 2013 sales estimate of $38.8 billion-$39 billion, a forecast that it cut in October, citing the delayed closure of its $600 million purchase of mobile computing device maker Intermec.
The supply problems had largely been fixed, Honeywell said in October.
Sales in Honeywell's aerospace business, which accounts for about a third of the conglomerate's total revenue and includes the defense and space business, would be flat to up 2 percent in 2014, Anderson said.
Honeywell said it would focus on cost cutting to drive margin growth. The company expects to make about $125 million in savings in 2014 as a result of a long-running restructuring program that has helped to rebuild the company over the last decade.
Honeywell's shares were down 0.4 percent at $87.06 on the New York Stock Exchange. They have risen 40 percent in the past 12 months, outperforming the S&P 500 index, which is up 25 percent.