Honeywell International Inc. (HON.N), which spun off two slower-growing businesses in October, is riding a business-jet rebound and an e-commerce boom that drove fourth-quarter profit higher than analysts’ expectations.

Organic sales -- excluding acquisitions, divestitures and currency fluctuations -- rose 6 per cent.

Key Insights

Honeywell’s aerospace unit is benefiting from sales of new business aircraft such as General Dynamics Corp.’s Gulfstream G500 and Bombardier Inc.’s Global 7500. Demand for the company’s warehouse-automation equipment is surging along with e-commerce.

CEO Darius Adamczyk’s move to shrink Honeywell to make way for faster growth and higher earnings is showing early signs of paying off. Segment profit margins rose to 20.1 per cent in the fourth quarter from 19.3 per cent a year earlier.

Honeywell joined U.S. manufacturers such as Boeing Co. and 3M Co. that painted a more optimistic picture of international demand for this year. Others, such as Caterpillar Inc., Nvidia Corp. and DowDuPont Inc., have cited slower demand in China as weighing on profit.

Honeywell expects first-quarter earnings to be US$1.80 to US$1.85 a share in the first quarter. Analysts had been expecting US$1.80. The company sees full-year earnings per share of US$7.80 to US$8.10, higher at its midpoint than the estimate of US$7.89. Organic sales are expected to be up as much as 5 per cent.

Market Reaction

• Honeywell was little changed at US$144 before the start of regular trading. The manufacturer lost 10 per cent of its value last year, compared with a 15 per cent decline on Standard & Poor’s index of industrial companies.