Honeywell International (HON), a diversified technology and manufacturing company worldwide, has posted a 5.28 percent increase in profit for the quarter ended Mar. 31, 2014. The company earned $1,017 million or $1.28 a share in the first-quarter, compared with $966 million or $1.21 a share a year ago.

Revenue during the first-quarter grew 3.76 percent to $9,679 million from $9,328 million in the last year period. Analysts on average had predicted net income of $0.13 a share.

Gross margin expanded by 74 basis points over the previous year period to 28.02 percent.

Total expenses as a percentage of revenues decreased to 85.81 percent from 85.89 percent in the same period last year. That resulted in improvement of 8 basis points in operating margin to 14.19 percent.

The company disclosed operating income of $1,373 million, compared with an operating income of $1,316 million in the last year period.

"Honeywell had a good start to the year with strong margin expansion driving better than expected earnings," said Honeywell Chairman and CEO Dave Cote.

"We saw 3% organic sales growth ex-Defense & Space, with strong execution across each of the businesses driving earnings above the high-end of our guidance. We remain cautiously optimistic on the macro environment, even with some nice momentum exiting the quarter in our short-cycle and long-cycle businesses driving organic sales growth acceleration as we progress through the year. As a result of the first quarter performance and overall favorable outlook for our key end markets, we're raising the low-end of our 2014 Proforma EPS outlook by $0.05 and our new guidance range is $5.40-$5.55. We are also increasing our cash flow forecast for the year given the strong first quarter working capital performance," he said.

"We remain confident in our outlook and intend to perform better than our peers driven by our diversity of opportunity, relentless seed planting in new products and technologies, continued penetration of High Growth Regions (HGRs), and growing traction on key process initiatives. We've also proactively redeployed non-operating gains and operational earnings to fund smart new repositioning projects benefiting 2015 and beyond. Our recently announced organizational changes demonstrate the strength of our organization, add further evidence to the effectiveness of the Honeywell operating model, and reaffirm our belief that the best is yet to come for Honeywell," he opined.

Cash flow

Honeywell International has generated cash of $688 million from operating activities during the quarter, up 101.76 percent or $347 million when compared with the last year period. It has generated 7.11 cents of operating cash flow in every sales dollar for the quarter, up from 3.66 cents for the same period last year.

The company has spent $345 million in cash to meet investing activities during the quarter, as against cash outgo of $311 million in the year period. It has made net capital expenditure of $185 million during the quarter, which was higher by 25 percent or $37 million from a year ago.

The company's free cash flow accounted for 73.11 percent of operating cash flow for the quarter, compared with 56.60 percent in the last year period.

The company has spent $48 million in cash to meet financing activities during the quarter, as against cash outgo of $58 million in the last year period.

The company has borrowed net of $513 million through debt during the quarter. It has spent net of $228 million on common stock repurchases. The company's cash dividend payment increased 12.73 percent or $41 million to $363 million. Dividend payment accounted for 52.76 percent of operating cash flow for the quarter, of Mar. 31, 2014 from 94.43 percent in the same period previous year.

As on Mar. 31, 2014, Honeywell International's cash balance stood at $6,672 million, up 46.99 percent or $2,133 million from Mar. 31, 2013.

Working Capital

Honeywell International witnessed an increase in the working capital over the year. It stood at $7,178 million as at Mar. 31, 2014, up $2,608 million or 57.07 percent from $4,570 million on Mar. 31, 2013. The company's current ratio increased to 1.50 as at Mar. 31, 2014 from 1.35 on Mar. 31, 2013.

Debt Position

Honeywell International has witnessed an increase in total debt over the last year. As at Mar. 31, 2014, the company's total debt stood at $9,356 million, up 21.52 percent or $1,657 million from Mar. 31, 2013.

The company's total debt accounts for 20.44 percent of total assets on Mar. 31, 2014, compared with 18.42 percent on Mar. 31, 2013.

The company witnessed a decline in debt to equity ratio to 0.52 on Mar. 31, 2014 when compared with 0.57 on Mar. 31, 2013.

Shares of HON rose $0.20 or 0.21 percent to close at $93.10 on Thursday.