Global engineering and technology giant Honeywell International turned in a stronger than expected start to the year thanks to a fast-recovering aerospace market and increased demand for diesel turbochargers in Europe.
According to Honeywell, its aerospace operations had an ‘outstanding’ first quarter of 2005, fuelled by growing demand for new planes from the world’s commercial airlines. Aerospace sales grew by nine per cent compared to the first quarter of 2004 with commercial markets racing ahead by 12 per cent, providing further evidence that the world’s civil aviation sector is returning to health following its post-9/11 slump. Defence aerospace sales grew by five per cent.
The last quarter saw Honeywell complete the purchase of Novar, a UK specialist in fire protection systems, and the US group has a cash pile of up to $4bn (£2.2bn), leaving it plenty of ammunition with which to target further acquisitions.
The group reported growth in its automation and control, and its security systems businesses. In security, Honeywell has picked up new orders in areas such as CCTV, contraband detection and mobile tracking from customers such as the Australian Immigration Service.
Honeywell’s transportation division enjoyed a particularly strong bounce from the booming demand for diesel engine turbochargers in Europe. Transportation sales rose by eight per cent in the quarter compared to 2004, thanks to the increased popularity of diesels with manufacturers such as VW. A new VW Passat diesel boosted by Honeywell’s VNT turbo system was unveiled at the Geneva Motor Show and the group said its turbocharger technology will be launched on more than 20 additional models during 2005.
Honeywell has high hopes that the success of its European turbocharger operations could eventually be repeated in the US, where diesel technology is slowly but surely gaining ground in the notoriously petroleum-centric US automotive industry. The only slight cloud on the horizon came in Honeywell’s speciality materials division, where sales fell by six per cent due to the divestment of its performance fibres business. However, improved profit margins offset much of the losses from the missing turnover.
Caterpillar, another US engineering giant with significant UK interests, also reported a stronger than predicted start to the year.
Growing demand from the mining sector and the Asia/Pacific region helped boost sales of its engines and industrial equipment by 30 per cent, and profits by 38 per cent compared to the same period last year. The company said global trends bode well for Caterpillar’s outlook.
‘Mining companies will continue to add capacity to meet anticipated growth in demand for several years. Global demand for energy, including coal, oil and gas, and large infrastructure projects are growing,’ Caterpillar told its investors.