(Reuters) - Honeywell International Inc on Thursday reported a better-than-expected quarterly profit and raised its full-year financial forecast as a boom in air travel drove demand for its aircraft parts used in the airline industry.
The company said adjusted sales rose across all its businesses in the first quarter, led by a 10 percent growth in its aerospace unit, Honeywell’s biggest business by revenue.
Higher demand for air travel is driving increased sales of parts such as avionics, braking systems and offerings for high speed internet connectivity in flights, the company said.
Honeywell is also seeing “robust demand environment” for business jets, Chief Financial Officer Greg Lewis told Reuters. “United States has really been the strong point for us in that regard.”
The company supplies engines, cockpit avionics and other aircraft parts to business jets made by Bombardier Inc and Textron Inc.
The company has also taken advantage of a boom in e-commerce as it sees rising sales of warehouse automation equipment and software to customers such as Amazon.com Inc.
Sales in safety and productivity solutions unit, which houses the business, rose 9 percent on a reported basis to $1.58 billion in the quarter.
Honeywell expects 2019 sales of $36.5 billion to $37.2 billion, up from $36.0 billion to $36.9 billion estimated previously. Earnings are expected to range between $7.90 and $8.15 per share, compared with its previous forecast of between $7.80 and $8.10 per share.
Honeywell said it had $14 billion in cash available to be deployed in 2019.
“M&A clearly is our first preference in terms of deploying the capital that we do have,” Lewis said.
“We are definitely thinking more in the bolt-on area again. Bolt-on could be a $2 billion deal. We are not really looking to make the transformational size deal.”
The CFO also said the company repurchased $750 million worth of shares in the first quarter and would have a pretty even share buyback program during the course of the year.
Honeywell earned $1.92 per share in the quarter, beating analysts’ average estimate of $1.83 per share, according to IBES data from Refinitv.
Revenue fell about 15 percent to $8.88 billion, due to certain divestitures, but was above analysts’ estimate of $8.64 billion.
Reporting by Ankit Ajmera in Bengaluru; Editing by Anil D'Silva