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Honeywell Profit Plunges

The weak aerospace sector pressures results.

Honeywell International

(HON) - Get Report

posted a 31% slump in second-quarter profit Thursday and expects a similar drop in the third quarter amid persistent weakness in the aerospace sector.

Citing "a difficult economic environment", the manufacturer reported net income of $319 million, or 37 cents a share, in line with estimates, down from $459 million, or 56 cents a share in the year-ago period. Honeywell blamed higher pension costs and lower sales at its more profitable businesses for the decline.

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But revenue climbed 1.7% to $5.75 billion, from $5.65 billion a year earlier with the help of a weaker dollar.

For third-quarter profits, Honeywell predicts a range of 38 cents a share to 42 cents a share, compared with 50 cents a year earlier. The outlook is still within Wall Street estimates of 41 cents a share.

"We continue to be focused on executing key strategies, improving customer service, reducing cycle times and investing to support our growth initiatives, said chairman and chief executive Dave Cote.

Honeywell also forecast earnings of $1.58 per share in full-year 2002, slightly above the average $1.57 per share estimate among analysts, but lower than last year's $2 a share.

Shares were 11 cents higher, or 0.4%, at $27.86.