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Aerospace unit margins drive Honeywell profit beat

[London] Honeywell International Inc, a maker of aircraft cockpit parts and other electronic equipment, reported a better-than-expected third-quarter profit, helped partly by higher margins in its aerospace business.

The company's shares rose 3 per cent in premarket trading after it also raised the low end of its full-year forecast range for profit and revenue.

Margins in its aerospace business, its largest, rose to 20.3 percent in the third quarter ended Sept 30 from 18.8 per cent a year earlier.

Honeywell has been able to perform well this year despite a sluggish global economy, mainly due to its focus on controlling costs.

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In July, the company merged its transportation division with its aerospace business to take advantage of the similarities in the units. "Looking ahead to 2015, we're once again planning for a slow growth macro environment, but expect to continue delivering strong earnings growth," Chief Executive Dave Cote said in a statement on Friday.

Honeywell said it now expected 2014 sales of US$40.3 billion-US$40.4 billion, compared with its previous forecast of US$40.2 billion-US$40.4 billion.

The company forecast earnings of at least US$5.50 per share for the year, up from its previous projection of at least US$5.45. It maintained the top end of the forecast range at US$5.55 per share.

Total revenue increased 4.8 per cent to US$10.11 billion.

Net income attributable to Honeywell rose to US$1.17 billion, or US$1.47 per share, from US$990 million, or US$1.24 per share, a year earlier.

Analysts on average expected earnings of US$1.41 per share on revenue of US$10.04 billion, according to Thomson Reuters I/B/E/S.

Honeywell's shares were up 3 per cent at US$89 before the bell. Up to Thursday's close, they had dropped 0.4 per cent in the past 12 months, compared with a 7 per cent rise in the S&P 500 index. REUTERS