UPDATE 2-Honeywell cuts revenue forecast as defense unit lags
Oct 18 (Reuters) - Honeywell International Inc on Friday posted lower-than-expected quarterly revenue on weakness at its defense unit, and the U.S. manufacturing conglomerate cut its full-year sales forecast.
Shares of Honeywell, which also makes cockpit electronics and systems to manage the climate and security of large buildings, fell nearly 3 percent.
Third-quarter sales dropped 11 percent in the Defense & Space Division, which supplies parts and equipment to military and government projects. Honeywell attributed the decline mainly to supply chain problems and the U.S. government sequestration program.
The supply problems have largely been fixed and should not resurface, Honeywell executives said.
The company raised the bottom end of its full-year profit outlook by 5 cents a share.
Honeywell has been working to increase productivity and cut costs in the past year, part of a wide-ranging plan to improve results.
"We're being proactive about keeping that restructuring pipeline full, which we think is critical to supporting our continued margin growth in 2014 and beyond," Chief Executive Officer Dave Cote said on a conference call with investors.
Honeywell now expects to earn $4.90 to $4.95 per share in 2013. The top end of the forecast matches analysts' expectations, according to Thomson Reuters I/B/E/S.
The company, though, now expects 2013 revenue of $38.8 billion to $39 billion, down from a previous forecast of $38.9 billion to $39.3 billion.
The company posted third-quarter net income of $990 million, or $1.24 per share, compared with $950 million, or $1.20 per share, a year earlier.
Revenue rose 3 percent to $9.65 billion, but missed analysts' expectations of $9.92 billion.
CEO Cote said performance should continue to improve next year.
"We're confident organic growth will accelerate for Honeywell in 2014," he said. "The foundation is in place for another great year."
Shares of the Morris Township, New Jersey-based company were down 2.7 percent at $84.44 in morning trading.