Honeywell International Inc (HON) posted better-than-expected earnings and revenue for the first quarter on Friday and raised its profit outlook for the full year amid strong sales from its aerospace unit.
Increase in travelling across the globe helped the company’s aerospace business as commercial airline industry purchased more parts and services, while demand from defense and business aircraft customers also surged.
Revenue from the aerospace unit jumped 12 percent to$3.98 billion and margins increased by 10 basis points to 22.5 percent. Chief Financial Officer Thomas Szlosek said growth in air transport and business aviation was almost double-digit, helped by strong deliveries on key platforms, including Boeing 737 and Airbus A320.
The New Jersey-based company said market has started to recover after President Donald Trump’s tax reductions, which is encouraging business community to spend more on business aircrafts.
An analyst at Vertical Research Partners, Robert Stallard said the company a bigger share of parts on latest business aircrafts like Gulfstream G500 and G600 that will benefit it when these jets get approved for sale later in 2018.
Honeywell is seeing continued double-digit growth in its defense unit amid increasing defense spending globally that will ultimately boost demand for parts and services offered by the company.
Looking forward, the company expects earnings in a range of $7.85 per share to $8.05 per share for the full year, up from its previous forecast in between $7.75 per share to $8.00 per share.
Honeywell also lifted its sales forecast for 2018. It now expects revenue in a range of $42.7 billion-$43.5 billion, up from its earlier projection in between $41.8 billion-$42.5 billion.
Overall, the company posted earnings of $1.95 per share for the first quarter, surpassing consensus forecast of $1.90 per share. Revenue came in at $10.39 billion, beating analysts average estimate of $10.02 billion.
