Honeywell Bags USAF Contract – Analyst Blog

Honeywell International (HON) announced that it has been mandated to supply newly designed Inertial Measurement Units, used to accurately position satellites in orbit, for the United States Air Force (USAF) Global Positioning Satellite III Program, in a contract worth $45 million.

 

The USAF Global Positioning System provides precise timing and positioning information for military and civil users. The GPS III system, scheduled to begin launch in 2014, will provide hitherto undetected signals to improve accuracy as well as anti-jamming measures that are critical for the U.S. military. Honeywell was chosen by Lockheed Martin Space Systems for the contract.

 

Honeywell is a leading supplier of electronics, consumable hardware, engine controls, environmental controls, landing systems, power systems, propulsion engines, aerospace services and space products and systems for the aerospace industry, including commercial and regional airlines, air cargo carriers, as well as Original Equipment Manufacturers (OEMs) of commercial, regional, military aircraft and spacecraft.

 

Honeywell’s attractive collection of businesses has the potential to earn consistent above-average returns. The company’s focus on working capital management, free cash flow generation and balance sheet strength remain positive attributes in the current weak environment.

 

The company is a global leader in refrigerants, aerosols and foam-insulation blowing agents used to replace ozone-depleting Chlorofluorocarbon and Hydro chlorofluorocarbons. Those same products also improve the energy efficiency of homes, appliances and commercial refrigeration systems.

 

The company’s proactive restructuring initiatives have positioned it to navigate better than many of its peers, but we have yet to see signs of stabilization in a number of its major end markets.

 

At Automation and Control Systems, the largest segment by revenue, industrial customers are delaying both capital and operating spending across a number of businesses, driven by weakening demand.

 

Honeywell International Inc. (HON) is a diversified technology and manufacturing company, serving customers worldwide with aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation.

 

We currently have a Neutral recommendation on HON.