Honeywell International Inc. (HON) - Get Report  pared some gains on Friday, Oct. 19, after management said that additional lists of tariffs could cost "hundreds of millions of dollars" even though the industrial conglomerate beat expectations for both sales and profits for the third quarter and lifted its full-year forecasts for cash flow and margins.

Morris Plains, N.J.-based Honeywell reported net income of $2.34 billion, or $3.11 a share. Adjusted earnings of $2.03 a share beat analysts' expectations of $1.99. Revenue of $10.76 billion also topped forecasts calling for $10.75 billion.

Aerospace sales were "flying high," according to Jefferies analyst Sheila Kahyaoglu, as they were up 10% on robust demand from business aviation original equipment manufacturers and continued strength in the U.S. and international defense business.

Overall, organic sales rose 7% "driven by continued double-digit growth in our warehouse automation business; strong growth across the Aerospace business; demand for Solstice low global-warming materials and short-cycle Process Solutions software and services; and continued momentum in Homes and ADI global distribution," CEO Darius Adamczyk said in a statement.

Honeywell, which makes items from aircraft engines to thermostats, revised its full-year outlook to reflect "the completion of the spin-off of Garrett Motion Inc. (GTX) - Get Report , which separated from Honeywell on October 1, and the expected completion of the spin-off of Resideo Technologies Inc. on October 29."

The company, which is a holding in Jim Cramer's Action Alerts PLUS charitable trust, raised the low end of its 2018 adjusted free cash flow to $5.8 billion, up from $5.2 billion, while maintaining the top end of the range at $6.2 billion. Honeywell also increased the low end of its segment margin range to 19.5% to 19.6%, compared to its prior forecast of 19.4% to 19.6%.

The company lowered its adjusted earnings per share range to $7.95 to $8.00, as the new guidance takes into account 27 cents of net earnings dilution from the separation of Garrett and Resideo businesses. Full-year sales are expected to come in between $41.7 billion and $41.8 billion, compared to its previous outlook of $43.1 billion to $43.6 billion.

Honeywell is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells HON? Learn more now.

Chief Financial Officer Gregory Lewis said the revised outlook incorporates the company's estimate of the tariff effect. 

"While we're hopeful there is ultimately resolution to the situation, we're planning for the worst and making structural changes, including modified some sources of supply, seeking alternative sources and taking other commercial actions as necessary to position us for 2019 and beyond," Lewis said on a conference call with analysts. "We have established a robust [margin of safety] across the company to ensure that we stay ahead of the situation though, and we'll continue to rigorously address any cost increases throughout our supply chain and adjust prices as necessary."

Shares of Honeywell rose 0.1% to $155.33 at 10:45 a.m. New York time. The stock had opened trading up 1.1% before tariffs concerns weighed on the shares. 

"Overall, we believe this was a terrific quarter for the company," Cramer and the AAP team said in a note to subscribers. "What one must remember how strong the Remainco is positioned. Our two key areas of focus, Aerospace and [Safety and Productivity Solutions], both grew organic sales by a double-digit clip and represent plays in two areas of secular themes in the market, aerospace and e-commerce. We believe the stock should be trading higher today off this strong print."