Honeywell shares hit 7-month low after profit forecast cut
By Ankit Ajmera
Oct 7 (Reuters) - Shares of Honeywell International Inc plunged as much as 9 percent on Friday, a day after the aircraft-parts maker cut the top end of its 2016 profit forecast and said that sales would fall more than it had expected this year.
Honeywell makes parts for business-jet makers Bombardier Inc , Textron Inc and General Dynamics Corp, whose shares also fell on the company's downbeat forecast.
"Conditions are more difficult than anticipated in both the business jet (original equipment manufacturing) and aftermarket businesses," Honeywell Chief Financial Officer Tom Szlosek said on a call with analysts on Friday.
Weakness in the oil and gas industry has reduced flying time for both business jets and helicopters, he said. Economic sanctions against Russia and an anti-corruption drive in China are also factors affecting demand, he added.
Honeywell's shares were down 7.8 percent at $106.50 in afternoon trading after hitting a seven-month low of $105.25. The stock was the third-biggest loser on the S&P 500 index .
Shares of Cessna jet maker Textron were down 3.5 percent at$38.53 while those of General Dynamics, the maker of Gulfstream jets, were down 0.8 percent at $152.94. Learjet-maker Bombardier's shares were down 1.1 percent at C$1.74.
Business-jet makers are forced to offer more discounts to prevent buyers from canceling orders or delaying purchases, analysts and dealers have said.
Honeywell said it had to pay higher incentives to commercial planemakers in the third quarter to encourage them to buy its equipment. Continued...