Honeywell International Inc. reduced its full-year sales forecast amid lower demand for its defense products and sees “continued slow growth” in 2014.
Sales this year at Honeywell, which makes products ranging from home thermostats to aircraft instruments, will be a maximum of $39 billion, down from a previous forecast of as much as $39.3 billion. The average of 19 analysts estimates compiled by Bloomberg was $39.2 billion.
Chief Executive Officer David Cote said revenue in the third quarter was lower than expected, hurt by an 11 percent drop in defense and space sales. The company is anticipating budget declines at the U.S. Department of Defense next year and sees a continuation of the across-the-board government spending cuts known as sequestration.
“Looking ahead to 2014, we are planning for a continued slow growth macro environment,” Cote said today in a statement.
Honeywell, based in Morris Township, New Jersey, fell 2.5 percent to $84.58 at the close in New York, the biggest decliner today among industrial companies on the Standard & Poor’s 500 Index. The shares have gained 33 percent this year compared with a 22 percent increase for the S&P 500 Index.
Revenue in the third quarter rose 3.3 percent to $9.65 billion, trailing the $9.91 billion average of analysts’ estimates compiled by Bloomberg.
Net income rose 4.2 percent to $990 million, or $1.24 a share, from $950 million, or $1.20, a year earlier, Honeywell said today. Analysts projected $1.24 a share, the average of 20 estimates compiled by Bloomberg.
Sales rose 10 percent to $1.63 billion at its Performance Materials and Technologies unit, which provides energy services such as natural gas filtration. Transportation unit sales rose 6.1 percent and sales climbed 4.3 percent at Automation and Control Solutions, the company’s largest unit.
Honeywell also boosted the lower end of its annual profit forecast. Earnings per share for 2013 will be $4.90 to $4.95, up from a previous projection of $4.85 to $4.95. The average of 22 analysts estimates compiled by Bloomberg was $4.95 a share.
“Going into today’s earnings, investors were already at the high end of earnings guidance and the company just raised the low end of the range,” said Christian Mayes, an analyst with Edward Jones & Co., who has a buy rating on the stock. “So maybe a little bit of disappointment from other investors on that.”