Honeywell announces a new collaboration with Bombardier. But it’ll weigh on this year’s profit.
The collaboration also resolves ‘all legacy pending litigation between the companies,’ Honeywell says
Last Updated: Dec. 2, 2024 at 8:08 p.m. ET
First Published: Dec. 2, 2024 at 5:51 p.m. ET
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Shares of Honeywell International Inc. fell in extended trading Monday after the conglomerate cut its outlook for the months ahead, citing the costs of investing in a new tech-focused collaboration with jet maker Bombardier announced earlier in the day.
Honeywell — which manufactures products that help power jets, and also makes building and safety technology as well as things like thermostats and air purifiers for homes — said that under the collaboration, it would bring new avionics, propulsion and satellite communications technology to Bombardier jets.
Honeywell, whose engines go into Bombardier’s private jets, said the new technology, along with aftermarket offerings, had the potential to generate up to $17 billion in sales over the course of the agreement.
The partnership also resolves “all legacy pending litigation between the companies,” Honeywell said. Bombardier
, in its own statement on Monday, also confirmed reaching a settlement for a lawsuit filed initially in 2016. The two companies over recent years had argued over whether Honeywell was offering better deals on engines to Bombardier’s competitors.
Honeywell on Monday said it now expects full-year sales of $38.2 billion to $38.4 billion, compared with a prior outlook for $38.6 billion to $38.8 billion. It said it expects adjusted earnings per share of $9.68 to $9.78, down from earlier expectations for $10.15 to $10.25. The company also trimmed its fourth-quarter sales and profit outlook.
“While the commercial agreement impacts near-term Honeywell financials, the company is confident it will lead to long-term value creation for Honeywell shareowners,” Honeywell said in a statement.
Shares fell 1.7% after hours on Monday, however. As of Monday’s close, the stock was still up 9.7% so far this year.
Last month, activist investor Elliott Investment Management called for a breakup of Honeywell, saying it would serve investors better.
About the Author
Bill Peters is a Los Angeles-based MarketWatch reporter who covers earnings.
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