BWA BorgWarner Inc

Honeywell International Inc. (HON) reiterated its full-year 2011 financial guidance and expects its third-quarter 2011 earnings per share to be at the high-end of its guidance range. Sales for 2011 are anticipated to be in the range of $36.1-36.7 billion, representing an increase of 12% to 14% from 2010 sales. The divested Consumer Products Group business (CPG) is excluded from 2011 sales guidance.

Proforma earnings per share, including 25 cents per share from discontinued operations, is expected to be in the range of $3.85-4.00, up 28% to 33% over 2010. Free cash flow guidance for the year remained unchanged at $3.5 billion to $3.7 billion, excluding the U.S. cash pension contributions.

The company expects third-quarter 2011 sales to be in the range of $9.1-9.4 billion, up 12-15% year over year. Earnings per share are expected to be at the high end of the guidance range of 96 cents to $1.01. Earnings for the quarter include earnings from discontinued operations (CPG) and considers full deployment of after-tax gains from sale of CPG and OPEB curtailments.

Honeywell’s short-cycle businesses as well as its commercial aerospace spares and residential and commercial retrofit businesses are performing impressively well and are expected to support future growth outlook of the company. The savings incurred from the implementation of Honeywell’s building techniques will be used for development without any need for outside funding. Further, the program will create job facilities for local contractors and housing authority residents.

Based in Morris Township, N.J., Honeywell International Inc. is a Fortune 100 company, providing technical and manufacturing support to customers worldwide. It also provides aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. Major competitors of Honeywell are BorgWarner Inc. (BWA), United Technologies Corp. (UTX) and Johnson Controls Inc. (JCI).

We currently maintain our Neutral rating on Honeywell, with a Zacks #3 Rank (Hold recommendation) over the next one-to-three months.

 
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