Honeywell on Friday announced disappointing third-quarter financial results that were in line with expectations the company had announced earlier this month.
Earnings per share remained flat at $1.60, while margins dipped 270 basis points over the same quarter last year to 15.6 percent. Overall profit for the quarter was $1.24 billion, down from $1.26 billion in the year-ago quarter.
Revenue grew just 2 percent to $9.8 billion for the quarter. The company attributed to the slowing growth to a 3 percent drop in core organic sales.
The company expects full-year sales for 2016 in the $39.4 billion to $39.6 billion range.
One of the company's hardest hit segments was its aerospace division, which saw a 20 percent drop in profits during the quarter to $663 million. Margins for that division were off 340 basis points to 18.4 percent. Honeywell attributed the drop in profits to the unfavorable impact of third-quarter OEM incentives, lower volumes in Business and General Aviation, program completions in the U.S. Space and international Defense businesses, and continued weakness in the commercial helicopter business.
Honeywell Chairman and CEO Dave Cote said in a earnings statement that Honeywell is positioned for double-digit earnings growth in the fourth quarter, leading to 8 percent to 9 percent earnings growth in 2016.
Cote called the most recent quarter one of "changes in many areas."
"We split the former Automation and Control Solutions business into two new reporting segments; closed the acquisition of Intelligrated and sold Honeywell Technology Solutions, Inc.; and spun off our Resins and Chemicals business as a freestanding publicly-traded company named AdvanSix Inc.," Cote stated. "We also funded approximately $250 million in restructuring and other actions from a $0.07 increase in first- and second-quarter EPS caused by an accounting standard adoption, and the $0.14 gain related to the sale of our government services business. These actions will drive more than $175 million of benefits in 2017 alone. We also intend in the fourth quarter to refinance outstanding debt maturing in 2017-2019, which will lower interest expense by approximately $60 million annually beginning in 2017."
Shares of Honeywell were up slightly in pre-market trading Friday to $108.14.
