Honeywell 2Q Earns Fall 38 Percent

In this July 24, 2009 photo, a Honeywell thermostat, for sale at a hardware store in Palo Alto,...

In this July 24, 2009 photo, a Honeywell thermostat, for sale at a hardware store in Palo Alto, Calif., is shown. Honeywell International Inc. said Monday, July 27, its second quarter earnings dropped 38 percent as the company's businesses in troubled sectors like automobiles and construction continued to drag down its results.(AP Photo/Paul Sakuma)

(AP)

Honeywell International Inc. said Monday its second quarter earnings dropped 38 percent as the company's businesses in troubled sectors like automobiles and construction continued to drag down its results.

The company said it doesn't expect any recovery this year from the recession, as customers such as airlines are expected to keep holding off on the purchase of Honeywell parts as they struggle with their own financial problems.

The Morristown, N.J.-based diversified manufacturer earned $450 million, or 60 cents per share, in the three months ended June 30, down from $723 million, or 96 cents per share, a year ago but matched the expectations of analysts polled by Thomson Reuters.

Revenue fell 22 percent to $7.56 billion from $9.67 billion a year ago. Analysts were expecting revenue of $7.73 billion.

The company expects 2009 earnings of $2.85 per share on revenue of $31.5 billion, at the low end of its previous guidance. Analysts foresee $2.83 per share and revenue of $32.61 billion.

Honeywell shares rose 25 cents to close at $34.24.

"We are executing very well. Unfortunately, it is a very tough economic environment," said Dave Cote, Honeywell's chief executive.

Honeywell has felt the sting of the recession this year, as its broad exposure to battered down sectors like aerospace and automakers reduced profits during the first half of 2009.

Analysts have applauded the company for its cost-cutting measures before the economic downturn hit and Honeywell still makes more than half of its money overseas, providing it somewhat of a hedge against the U.S. woes. Honeywell said it expects to reduce costs through restructuring by about $110 million this year with steps like plant shutdowns and furloughs, actions it expects will save $200 million next year.

But the company warned that this would still be a difficult year, and it cut its forecast when it released its first quarter earnings in April.