[R]1:15PM New York – Honeywell revenue increases 11% and earnings surges 30% on orders in aviation industry. Xerox struggles with earnings.[/R]

Honeywell International Inc. (HON: chart) stock added $3.39 to $60.80 after it announced first quarter 2008 sales increase of 11% to $8.9 billion from $8.0 billion in 2007.

Earnings in the quarter were up 30% to $643 million or $0.85 per diluted share compared to $526 million or $0.66 per diluted share for the same quarter of 2007.

Aerospace sales increased 7%, compared with the first quarter of 2007, 8% growth in commercial and 5% growth in defense and space sales.

Commercial sales reflected growth of 8% in original equipment and 8% in aftermarket spares and services. Honeywell secured a $1.5 billion contract including aftermarket to provide the flight management system and the surveillance system for Airbus'' new long-range, extra wide-body A350XWB aircraft.

In September 2007, Honeywell was selected by Airbus to provide advanced air management systems and auxiliary power unit technologies for the Airbus A350XWB in a contract valued at $16 billion including aftermarket over the life of the contract.

Automation and control solutions sales rose 14%, compared with the first quarter of 2007 and segment profit grew 20%, while segment margin increased by 0.5% to 10.3%.

Transportation systems sales increased 6% compared with the first quarter of 2007. Segment profit decreased 4%, while segment margin declined by 1.30% to 11.7%.

Specialty materials sales were up 18% compared with the first quarter of 2007. Segment profit grew 38%, while segment margin increased by 2.80% to 18.8%, driven by pricing and productivity gains offsetting inflation.

An upgrade of existing production capabilities, combined with overall productivity improvements, is expected to boost Aclar production by up to 23% by the end of 2008.

Xerox Corporation (XRX: chart) stock added 37 cents to $14.87 after it reported total revenue increased 13% to $4.3 billion with post-sale revenue rise of 11%. After-sales revenue now represents 70% of total revenue.

Photocopying company first quarter net loss was $244 million or 0.27 cents per diluted share compared to net profit of $233 million or $0.24 cents a year ago.

Xerox technology is accelerating the adoption of digital color printing in businesses and commercial print enterprises. Revenue from color grew 13% in the first quarter and represents 40 % of Xerox’s total revenue, up 3 points from the first quarter of 2007.

During the first quarter, the combination of product mix, pricing and currency-related costs resulted in gross margin of 39.3%, down 1.3 points from the prior year.

The company generated $52 million in operating cash flow and repurchased $334 million in Xerox shares in the first quarter.