Honeywell's Profit Falls as Organic Sales Decline
October 21 2016 - 8:13AM
Dow Jones News
By Austen Hufford
Honeywell International Inc. issued the downbeat earnings report
it had forecast earlier this month, saying an unexpectedly weak
September and lackluster performance in the aerospace segment hurt
profit.
Honeywell shares had dropped 7.5% on Oct. 7 after the company
lowered its sales and profit outlooks and preannounced the
third-quarter results.
Chief Executive Dave Cote told investors at the time that sales
had "failed to materialize" in the third quarter. Friday, the
company reported results largely in line with those forecasts.
For the year, Honeywell expects sales of $39.4 billion to $39.6
billion, with core organic sales, which excludes currency
fluctuations and deals, falling between 1% and 2%. Analysts had
expected $39.63 billion in sales.
During the quarter, the industrial conglomerate reported an
overall profit of $1.24 billion, down from $1.26 billion. On a
per-share basis, earnings were flat at $1.60. When excluding
restructuring and other costs, earnings per share for the quarter
were $1.67.
Revenue grew 2% to $9.8 billion as core organic sales fell
3%.
Analysts polled by Thomson Reuters had expected earnings per
share of $1.60 on $9.79 billion in sales.
In the company's aerospace segment, organic revenue and
unadjusted revenue fell about 6% due to the impact of sales
incentives, lower volumes in business and aviation, weakness in
commercial helicopters and the completion of space and
international defense programs.
For the fourth quarter, Honeywell expects sales to fall 7% to 9%
due to weakness in the business jets, defense and space areas.
Revenue in its safety and productivity solutions unit fell 2.2%.
Core sales dropped 8% due to lower volume associated with a
completed U.S. Postal Service contract and lower volumes in its
safety business.
Revenue in its performance materials and technologies unit grew
2.2% as core sales declined 3% due to declines in gas processing,
licensing and engineering. During this quarter, the company expects
sales to fall 4% to 5% while core sales are expected to increase 2%
to 4% on stabilizing oil prices.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 21, 2016 07:58 ET (11:58 GMT)
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