BOSTON (Reuters) - Diversified U.S. manufacturer Honeywell International Inc said profit eased 1 percent, reflecting weak demand for aviation components and equipment used to heat and cool large buildings.
The world's largest maker of cockpit electronics, whose shares fell 4.6 percent in premarket trading, held its full-year profit forecast steady but set initial first-quarter profit guidance that was lower than analysts had expected.
"We should all be cautious about the year ahead of us, particularly the first half," Chief Executive Dave Cote told investors on a conference call. "We are, as usual, planning conservatively in 2010, with modest organic sales growth."
Sales declined across the company's aerospace and automation and control systems divisions, as airlines trimmed back maintenance budgets and commercial construction activity stayed slow in the United States and Europe.
Fourth-quarter earnings came to $698 million, or 91 cents per share, compared with a profit of $707 million, or 97 cents per share, a year earlier.
The results came in a penny ahead of analysts average forecast of 90 cents per share, according to Thomson Reuters I/B/E/S.
Revenue fell 7 percent to $8.07 billion. Wall Street had looked for $8.15 billion in revenue.
The Morris Township, New Jersey-based company, which also makes automotive turbochargers and specialty chemicals, has forecast a rebound in demand this year, though pension accounting costs will weigh on its bottom line.
The company reiterated its 2010 profit forecast of $2.20 to $2.40 per share this year, including 80 cents of anticipated non-cash charges related to pension accounting.
For the year, analysts look for profit of $2.40, excluding items.
The company expects first quarter profit of 35 cents to 40 cents per share on revenue of $7.2 billion to $7.6 billion. Analysts, on average, had looked for profit of 47 cents per share on $7.63 billion in revenue.
Its shares were down $1.82 at $38 in premarket trading.
Prior to Friday's action, HONEYWELL (HON.NY)shares were up about 15 percent over the past year, lagging the 26 percent rise of the Standard & Poor's capital goods industry index <.GSPIC>.
Honeywell's competitors include United Technologies Corp
(Reporting by Scott Malone; Editing by Derek Caney)