Updated from 2:48 p.m. EDT

Honeywell International

(HON) - Get Report

said Monday that its second-quarter earnings will miss Wall Street's expectations due to weaker-than-expected revenue, parts shortages, higher-than-expected raw material prices and higher interest rates.

Shares of Honeywell dove 15% on rumors of the earnings shortfall. The company's shares settled down 18%, or 8 5/8, to 39 7/8 after reaching a 52-week low of 38.

Earnings per share for the quarter will come in between 73 cents and 77 cents, said the Morristown, N.J.-based company, which makes a variety of products, from turboprop engines to home heating controls. The consensus estimate of analysts polled by

First Call/Thomson Financial

was 78 cents.

Second-quarter revenues are expected to grow by only about 7% to 8%, instead of the original 11% forecast. Meanwhile, free cash flow is expected to range from $250 million to $300 million.

The parts shortage occurred in Honeywell's aerospace unit, one of its four business units and the one responsible for about 40% of the company's sales. The unit makes turbofan and turboprop engines, as well as flight safety and aircraft landing systems.

Higher-than-expected costs for raw material, such as oil, affected Honeywell's performance materials unit, which makes materials used in semiconductors, specialty chemicals and polymers for electronics and carpet fibers.

Phua Young, an analyst at

Merrill Lynch

, reduced his earnings per share estimates for 2000 and 2001. For 2000, Young is assuming a range of $3.15 to $3.20, from $3.25. For 2001, he is now assuming a range of $3.70 to $3.75, from $3.80. Young rates Honeywell a buy and his firm has participated in underwriting for the company.

The company expects to report its second-quarter earnings on July 18.