Honeywell Says Earnings Will Fall Short of Estimates

Honeywell International Inc. said Monday its second-quarter earnings would miss Wall Street expectations amid a revenue shortfall and a shortage of parts available from suppliers for its aerospace business.

The diversified manufacturer, a component of the Dow Jones industrial average, also said it was hurt on the cost side by higher raw-material prices and higher interest rates.

Costs for raw materials such as those Honeywell uses in its performance materials unit have soared along with the price of crude oil, reaching nine-year highs in spring.

Honeywell, which makes products ranging from turbine engines to aircraft control systems to specialty chemicals, said it expects to earn 73 to 77 cents a share in the second quarter.

Analysts had on average forecast 78 cents a share, according to First Call/Thomson Financial. The company earned 67 cents a share in the same period and had been guiding analysts toward 17% earnings growth.

Honeywell, based in Morris Township, N.J., said it expects second-quarter revenue to be up 7% to 8%. The company had indicated 9% or 10% revenue growth, said Harriett Baldwin, an analyst with Deutsche Banc Alex. Brown.

Honeywell’s statement did not spell out the exact nature of the revenue shortfall. A spokesman declined to elaborate, but said the company would offer more specifics when the quarter closes, at the end of June.

Honeywell said it was still evaluating its full-year forecast and expects to provide further guidance in the coming weeks. The company is expected to report second-quarter earnings July 18.

The current company was created by the $16-billion merger of the old Honeywell and AlliedSignal last December. Honeywell reported a strong first quarter, which management touted as allaying concerns that the merger integration would cause profit problems.

Honeywell shares dropped $8.25, or 17%, to close at $40.25 in heavy trading on the New York Stock Exchange.