Highlights
- * Honeywell shares decline modestly in debut
- * Spinoff is part of a broader breakup of industrial conglomerate Honeywell
- * CEO says spinoff will help the company better meet growing demand from Boeing and Airbus
Honeywell Aerospace shares
closed down 0.4% on Monday after the company made its Nasdaq
debut following its spinoff from Honeywell as part of a
broader breakup of one of the last major industrial
conglomerates.
Shares opened the day higher, at one point gaining about 7%,
before falling back on volume of about 8.5 million shares to end
down 82 cents at $220.19 a share.
The company’s debut comes at a time of strong investor appetite
for aerospace and defense assets, driven by pent-up demand and
rising military spending.
CEO Jim Currier said the spinoff will help the company
better meet demand from planemakers Boeing and Airbus
by allowing it to make decisions more quickly, such as
whether to deploy capital to support higher production.
“We can support Boeing and Airbus as they’re continuing to
ramp,” Currier said. “We have very, very clear visibility in
terms of their ramp needs going forward.”
The U.S. maker of auxiliary power units, avionics and other
aircraft systems expects $6.5 billion in adjusted earnings by
2030. It foresees sales growth of 7% to 9% this year and free
cash flow of $1 billion to $1.5 billion.
Honeywell in 2025 announced it would separate into three
standalone companies focused on automation, aerospace and
advanced materials in a process expected to conclude this year.
Commercial and private jet makers are struggling with supply
chain challenges that have weighed on output.
Honeywell Aerospace is also looking at M&A opportunities focused
on technologies in high demand in aerospace, such as
electrification, autonomy, safety, productivity and efficiency,
he added. The company said earlier this month it would
prioritize investing to grow its capacity and supply chain,
rather than emphasizing dividends or share buybacks.
Currier said planemakers are also more open about their
growth plans with large suppliers like Honeywell.
“There used to be a little bit of a lack of transparency
historically in the past about what those production rates would
be that drive second guessing: Are they really going to achieve,
are they not going to achieve?” he said.
“That transparency now is at a level I’ve never seen before,
which really in a supply-constraint environment is necessary,”
he said.