TRENTON, N.J. – Aerospace and high-tech manufacturer Honeywell International Inc. (HON) said Wednesday it will trim 2,000 jobs from its aerospace division, as it reported adjusted second-quarter profit grew 29 percent on surging sales even as a one-time charge for repatriating foreign earnings depressed net income.
Honeywell Chief Financial Officer Dave Anderson told The Associated Press that 10 percent to 20 percent of the job cuts would be through attrition and the rest through layoffs by year's end. He declined to say where the cuts would occur.
The cuts — about 5 percent of Honeywell's 40,000-person worldwide aerospace work force — are part of the division's restructuring that began earlier this month.
"A big part of the feedback we were getting from customers was that we were too complicated to do business with," CEO Dave Cote said in a conference call with analysts. "People didn't want to have to do business with three different parts of the organization."
Over time, the company will take a $60 million to $80 million charge for reducing its work force.
In its second-quarter report, Morris Township-based Honeywell posted net income of $306 million, or 36 cents per share, down from $361 million, or 42 cents per share, for the same period in 2004.
But the second quarter's result included a one-time charge of $155 million, or 18 cents per share, because Honeywell took a tax break for bringing international income back into the United States.
Setting that charge aside, Honeywell reported net income of 54 cents per share, exceeding the estimate of Thomson Financial analysts by 4 cents.
"As we say up in New Hampshire, it was a wicked-good quarter," Cote said.
"Orders are up, pricing and productivity actions are offsetting higher commodity and raw materials costs, we introduced great new products and won important new contracts," he said.
Revenue grew 10 percent to $7.02 billion from $6.39 billion.
The company's core aerospace division saw its sales grow 8 percent to $2.65 billion on the strength of commercial business jet sales. Meanwhile, Honeywell's Automation and Control Solutions segment, which makes a variety of process and building management systems, posted 21 percent sales growth to $2.39 billion. The company's smaller, specialty materials business was the only unit to record lower sales. Its revenue declined 12 percent to $795 million because of a divested business.
Honeywell raised guidance for 2005, now expecting earnings of $1.87 to $1.97 per share, or $2.05 to $2.14 per share excluding items. The company boosted sales estimates by $400 million to between $27.8 billion and $28 billion. Analysts currently forecast 2005 adjusted profit of $2.04 per share on sales of $27.64 billion.
Honeywell's aerospace business merged with Allied Signal Corp. (search) in 1999. A merger with General Electric (GE) was blocked by the European Unionin 2001.
Honeywell shares rose 41 cents, or 1.1 percent, to $38.01 on the New York Stock Exchange, near the high end of a 52-week range of $31.85 to $39.50.