Honeywell CEO Tries to Explain Surprise Shortfall
October 07 2016 - 10:40AM
Dow Jones News
Honeywell International Inc. said an unexpectedly weak September
was to blame for an anticipated drop in its annual sales, which
confused and spooked investors in the aerospace and building
systems conglomerate.
Chief Executive Dave Cote told investors Friday morning that
sales in areas such as aftermarket services for business jet
engines and hand-held scanners for shippers and logistics companies
"failed to materialize" in the third quarter, requiring the company
to cut its targets for earnings and annual sales.
"We expected short cycle orders that normally materialize," Mr.
Cote said. "They usually do, but in this case, they didn't."
The announcement, which triggered a sharp selloff in Honeywell
shares, was "uncomfortable," Mr. Cote said on a conference call.
The stock was down 8% to $106.37 in morning trading in New
York.
Still, he said, the company remains confident in its direction
for the long term.
"This is the bottom" for Honeywell businesses exposed to the oil
and gas industries, Mr. Cote said, even as he cautioned troubles in
the business jet industry "will get worse" next year.
Sales related to business jets were hurt by a variety of
factors, executives said, including slowing growth in emerging
regions including the Middle East, Russia and China, where Chief
Financial Officer Tom Szlosek said an anticorruption campaign has
blunted the market for luxury goods such as private aircraft.
Write to Ted Mann at ted.mann@wsj.com
(END) Dow Jones Newswires
October 07, 2016 10:25 ET (14:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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