(Reuters) – Honeywell on Monday cut its profit and sales forecasts for the fourth quarter and the full year to take into account investments associated with an agreement to provide aviation-related technology for Bombardier’s aircraft. Honeywell’s shares fell about 2% to $226 after the bell. The agreement will provide Honeywell’s avionics, propulsion and satellite communication […]
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Honeywell lowers sales, profit forecasts after Bombardier agreement
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(Reuters) – Honeywell on Monday cut its profit and sales forecasts for the fourth quarter and the full year to take into account investments associated with an agreement to provide aviation-related technology for Bombardier’s aircraft.
Honeywell’s shares fell about 2% to $226 after the bell.
The agreement will provide Honeywell’s avionics, propulsion and satellite communication technologies for Bombardier’s aircraft.
Honeywell said it expects the agreement to have a near-term impact on its financials, given the investments for research and development. The company added that it estimates revenue potential of up to $17 billion over the duration of the agreement.
Honeywell lowered its fourth-quarter sales forecast to between $9.8 billion and $10.0 billion, from its prior forecast range of $10.2 billion to $10.4 billion.
It also cut its adjusted earnings per share outlook to between $2.26 and $2.36, compare with its previous forecast range of $2.73 to $2.83.
Honeywell and Bombardier also said that all pending litigation between the companies has been resolved.
Bombardier had previously alleged Honeywell of selling propulsion systems to its rivals on more favorable terms, despite guarantees that the Canadian planemaker would get the best price.
(Reporting by Abhinav Parmar in Bengaluru; Editing by Shounak Dasgupta)