Honeywell to Slash Payroll
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MORRIS TOWNSHIP, N.J. — Honeywell International Inc. said Tuesday that it will fail to meet profit estimates and plans to cut thousands more jobs because it expects airlines to reduce purchases of avionics and cockpit controls in the wake of last week’s terrorist attacks.
Honeywell said it expects third-quarter profit from continuing operations of 43 cents to 45 cents a share, compared with 76 cents a year ago. Analysts on average had expected 53 cents, according to Thomson Financial/First Call.
Morris Township-based Honeywell now plans to eliminate more than 12,000 jobs this year, about 10% of its work force. The company had announced plans to eliminate 8,200 positions.
Larry Bossidy, who was reinstated as chairman following Honeywell’s failure to be acquired by General Electric Co., is trying to stabilize the company.
Honeywell, sought by General Electric for the very business that is now stumbling, had lowered profit estimates three times in a year before Bossidy returned. Honeywell stock has lost 40% of its value this year.
General Electric’s agreement to buy Honeywell topped a bid from United Technologies, which said Monday that profit would be reduced by expected losses in the airline industry.
The European Commission in July rejected General Electric’s acquisition of Honeywell because regulators were concerned the combination would dominate commercial aerospace sales.
Honeywell’s automated-control business, the world’s biggest, will help make up for lost sales in commercial aerospace, Bossidy said. He also expects rising demand for travel in business jets, which will add sales. Automated controls range from thermostats to devices that run factory machinery.
Bossidy plans to outline prospects for the company at a meeting for analysts and investors Monday.
Honeywell said its fourth-quarter profit will exceed that of the third quarter, but it did not provide a figure.
Shares of Honeywell, which have lost 40% in value this year, fell 99 cents to $28.51 on the New York Stock Exchange.
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