Honeywell raises 2025 forecasts on sustained demand for aerospace parts, services

This Aug. 15, 2014 photo shows the Honeywell InturVue weather radar in the cockpit of a Convair 580 plane during a flight demo over Florida. (AP Photo/Alan Diaz)

Honeywell raised its annual forecasts after beating Wall Street expectations for second-quarter results on Thursday, buoyed by strong demand for its aerospace parts and maintenance services.

Shares of the company rose 1.5 per cent in premarket trading.

The company, which supplies avionics and flight control systems to Boeing and Airbus, has benefited from rising demand as planemakers ramp production after long delays due to supply chain issues.

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Honeywell has also capitalized on a shortage of new jets, providing aircraft maintenance and repair services as airlines continue to fly an older, cost-intensive fleet.

The company’s aerospace division, its biggest revenue generator, posted a 10.7 per cent jump in sales to US$4.31 billion in the second quarter.

Honeywell now sees 2025 adjusted profit per share between US$10.45 and $10.65, up from its previous forecast of US$10.20 to US$10.50.

The company also raised its revenue outlook and now expects between US$40.8 billion and US$41.3 billion for the year, up from the US$39.6 billion and US$40.5 billion it had previously forecast.

The engines-to-switches conglomerate has been in the process of streamlining its portfolio under CEO Vimal Kapur, making acquisitions as well as shedding assets weighing on its business.

After pressure from activist investor Elliott Management, Honeywell in February announced plans to separate its businesses. The company will spin off its aerospace business and retain the automation segment, which will be led by Kapur.

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Honeywell is reviewing alternatives for its productivity solutions and services unit and the warehouse and workflow solutions division, which have been a drag on the company’s earnings in the past few quarters.

The industrial automation unit, which houses the businesses, reported a five per cent fall in sales in the second quarter.

Total sales, meanwhile, rose 8.1 per cent to US$10.35 billion, exceeding analysts’ average estimate of US$10.07 billion, per data compiled by LSEG.

Honeywell reported an adjusted profit of US$2.75 per share, also beating analysts’ expectations of US$2.66.

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Reporting by Utkarsh Shetti in Bengaluru; Editing by Shinjini Ganguli