Honeywell International Inc. (HON) entered into an agreement with Inmarsat to provide business, commercial, and government aviation customers with in-flight connectivity services wherever they go. In this deal, onboard hardware connecting users to Inmarsat’s Global Xpress(TM) network will be developed, produced and distributed by Honeywell.
Over the next twenty years, the contract will generate $2.8 billion for Honeywell through sales of hardware, customer service, and maintenance to airlines, government entities and original equipment manufacturers (OEMs). Inmarsat’s Global Xpress is planned to be launched in 2013 and will be available globally for commercial, business aviation, and government customers in 2014.
Honeywell’s satellite communication capabilities along with Inmarsat’s Global Xpress connectivity will help travelers in any part of the world to do real-time social media, video conferencing and multi-media presentation development while in-flight. The passengers can get quick and reliable connectivity, even while they are flying through oceans, on their iPads, smartphones, tablet devices, and laptops.
The market for airborne connectivity solution market is expanding rapidly and Honeywell enjoys a leading position in this market.
Honeywell’s short-cycle businesses as well as its commercial aerospace spares and residential and commercial retrofit businesses are performing impressively well and are expected to support the company’s future growth outlook. However, any change in the U.S. government’s defense and aerospace funding could adversely impact sales of Aerospace’s defense and space-related products and services.
Based in Morris Township, N.J., Honeywell International Inc. is a Fortune 100 company providing technical and manufacturing support to customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; turbochargers; and specialty materials. The major competitors of Honeywell are BorgWarner Inc. (BWA), United Technologies Corp. (UTX) and Johnson Controls Inc. (JCI).
We maintain an Outperform rating on Honeywell, with a Zacks #1 Rank (Strong-Buy recommendation).
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