TRENTON, N.J. (AP) _ Honeywell International posted a 53.5 percent drop in fourth-quarter profit as hefty one-time charges and falling sales for commercial aviation and other products outweighed aggressive cost-cutting.

The maker of high-tech aerospace, automotive and security products on Tuesday reported net income of $118 million, or 14 cents per share, down from $254 million, or 31 cents per share in the same period a year ago.

The Morris Township-based company said fourth-quarter net income would have been $447 million, or 55 cents per share, excluding one-time charges: $440 million for settling an 11-year patent dispute with Northrop Grumman that frees Honeywell to sell certain navigation systems and $100 million for costs related to British Aerospace's cancellation of a regional jet contract.

Analysts surveyed by Thomson Financial/First Call had forecast earnings per share of 55 cents. The company's shares fell $1.15, or 3.6 percent, to close at $30.90 on the New York Stock Exchange.

In 2000's fourth quarter, Honeywell recorded net income of $569 million, or 70 cents per share, excluding one-time pretax charges of $410 million, mainly for decreased value of assets and environmental cleanup costs.

``Our improved cost structure makes us confident Honeywell's performance will be better overall in 2002,'' Lawrence A. Bossidy, chairman and chief executive, said in a prepared statement.

Bossidy predicted a difficult first half of the year due to the weak economy, but said he expects earnings per share to total $2.36 for 2002. The analyst consensus for 2002 is $2.30 per share, according to Thomson Financial.

Two major productivity programs should help deliver $1.3 billion in cost productivity over 2002, he said. Already, the programs cut overhead $221 million last year through steps such as closing 51 facilities and trimming management.

Rob Norfleet, an analyst at Davenport & Co., said he was pleased with the company's rapid turnaround since the unexpected collapse of its merger with General Electric last July, crediting Bossidy's return to the helm then for a 24 percent rise in cash flow and the productivity improvements.

``It basically points to Honeywell turning the corner and getting back to their historical growth benchmarks,'' he said.

``We think this further reinforces our buy recommendation'' for Honeywell stock, Norfleet said. ``This company has the leading positions in several lucrative growth markets,'' such as aviation safety systems, military aerospace products, power systems and turbochargers.

Sales for the fourth quarter slipped 9.3 percent, to $5.85 billion from $6.45 billion in the October-December quarter of 2000.

``Sales are actually a little better than we thought'' they would be, said Phua Young, an analyst at Merrill Lynch.

``I think the company's a lot more focused now,'' Young said, and will continue cutting costs if the economy doesn't pick up in the second half of the year, as Bossidy predicted.

Sales for aerospace products, Honeywell's biggest division, dropped 13 percent, to $2.34 billion from $2.68 billion, mainly due to the decline in commercial air travel since Sept. 11. That drop was slightly offset by increased military and governments sales.

The slowdown in the electronics industry helped pull down sales in Honeywell's specialty materials division 21 percent, and sales dipped 3 percent for the automation control solutions division, which makes security and automation systems for industry, buildings and homes.

Only the transportation and power systems division saw higher sales _ a 2 percent increase to $880 million.

For all of 2001, Honeywell reported a net loss of $99 million, or 12 cents per share, due to a total of $2.8 billion in pretax charges for restructuring and other costs. Excluding the those charges, net income would have been $1.67 billion, or $2.05 per share.

In 2000, Honeywell reported net income of $1.66 billion, or $2.05 per share, including pretax charges totaling $966 million for restructuring, environmental cleanup costs, decreased value of certain assets and other costs. Excluding those charges, net income would have been $229 billion, or $2.83 per share.

Revenues for the full year totaled $23.65 billion, down 5.5 percent from 2000 revenues of $25.02 billion.

Honeywell also makes engineered materials, including specialty chemicals, plastics and fibers. It has about 115,000 employees in 95 countries.


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