Citing the continued recovery of the business aviation market and defense business demand, Honeywell upped its sales expectations for the second half of this year. Honeywell originally had projected an organic increase in sales of 3 percent to 5 percent in the last six months of 2018, but now expects this growth in the 7 percent to 8 percent range, vice president of corporate finance Greg Lewis, who will step into the CFO role on August 3, told analysts late last week.
Business aviation OEM growth helped spur the 8 percent increase in Honeywell Aerospace sales in the second quarter to $4.058 billion, the company said. Operating margin for aerospace grew to 22.6 percent for the quarter, with profits of $918 million, compared with $819 million in second-quarter 2017.
“We expect the sales momentum to continue throughout the second half of the year,” added Honeywell chairman and CEO Darius Adamczyk, crediting business aviation as playing a role in a 14 percent boost in its “long-cycle backlog.”
Lewis agreed: “We expect continued strength in commercial aviation, original equipment sales with higher shipment volumes on the Boeing 737, the Embraer [Legacy] 450 and L500, and Dassault [Falcon] 8X platforms.”
He further pointed to the decline in used business jet inventories and the fact that a number of new aircraft certifications were happening in 2018. “We have good positions on the right platforms across super-midsize and large-cabin business jets,” Lewis said.
Honeywell is further eying increases on the MRO front in business aviation, as well as “continued double-digit growth for the connected aircraft, driven by demand for JetWave hardware and GoDirect services,” he said.
Adamczyk highlighted the recent launch of Dassault’s FalconConnect program that is powered by Honeywell routers, ground infrastructure, and GoDirect connectivity services. FalconConnect, he said, facilitates management of connectivity in the flight deck and cabin, capturing data, building in safety links, and providing high-speed cabin Internet. The service is available on all Falcon jets, he said.
