SEC Opens Probe of Honeywell -- WSJ
October 20 2018 - 3:02AM
Dow Jones News
By Kimberly Chin
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (October 20, 2018).
Honeywell International Inc. said the Securities and Exchange
Commission has opened an investigation into the company's
accounting for asbestos-related liabilities.
The conglomerate said the investigation follows discussions with
the SEC that prompted it to correct and restate its asbestos
liabilities by about $1.1 billion more than its prior estimate.
The company, in an SEC filing Friday, said the SEC's division of
enforcement had notified Honeywell on Sept. 13 that it was opening
an investigation.
The company said it intended to cooperate with the probe and
provide requested information.
Honeywell said it had revised its previous results to correct
how it accounts for legacy liabilities from Bendix Corp., a
vehicle-brakes company that Honeywell sold more than a decade ago,
but was hit with thousands of asbestos-related claims.
Honeywell said its revised liabilities are now $2.61 billion as
of Dec. 31, 2017, which is $1.1 billion higher than its previous
estimate.
"We will fully cooperate with the SEC on its inquiry," Honeywell
said late Friday. In a statement, the company said it previously
disclosed the accounting correction and the SEC's division of
corporate finance had closed its review on Sept. 9.
Also on Friday, Honeywell reported its latest quarterly results.
It lowered its full-year guidance profit guidance to reflect the
spinoffs in its home and transportation businesses, while also
reporting positive quarterly results supported by higher volumesand
demand for its warehouse automation and aerospace segments.
Honeywell now expects to earn between $7.95 and $8 a share,
lower than its previous range of $8.05 to $8.15 a share. It expects
sales to come in between $41.7 billion and $41.8 billion, compared
with its previous guidance of $43.1 billion to $43.6 billion. It
also expects organic sales growth to hit 6%, compared with its
prior guidance of between 5% and 6%.
The company recently spun off its transportation-systems
business as a separate entity called Garrett Motion Inc., and it
plans to complete the spinoff of its home business, which will
become Resideo Technologies Inc., on Oct. 29.
Net sales at the New Jersey-based industrials firm rose 6% to
$10.76 billion from the same quarter a year ago. Product sales were
up 5%, while service sales rose 10%. Honeywell reported sales
increases in all of its segments: aerospace, home and building
technologies, performance materials and technologies and safety and
productivity solutions. Analysts polled by Refinitiv were expecting
sales of $10.75 billion.
Honeywell reported profit rose 73% to $2.34 billion, or $3.11 a
share, from a year ago. On an adjusted basis, the company earned
$2.03 a share. Analysts expected the company to earn $1.99 a share.
Honeywell said it received a tax benefit of $498 million.
Shares of Honeywell, up 2.3% for the year, rose 3.2% to $160.17
a share in premarket trading on low volume.
Write to Kimberly Chin at kimberly.chin@wsj.com
(END) Dow Jones Newswires
October 20, 2018 02:47 ET (06:47 GMT)
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