Honeywell International (HON) received an extension to an annual operating  contract from the National Nuclear Security Administration in Kansas City. The estimated cost of the three-year extension program is $1.8 billion and includes two additional one-year options for further extension.
 
There will be a transition period from October 1 through December 31. Performance on the new contract will then start from January 1, 2011. The three-year period is expected to continue until September 2013.
 
Honeywell Federal Manufacturing & Technologies division is a management and operating contractor for the National Nuclear Security Administration’s Kansas City Plant contract.  The facilities under management include multi-faceted engineering and manufacturing operations with emphasis on electrical, mechanical and engineered material components.
 
Honeywell’s attractive collection of businesses has the potential to earn consistently 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’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.
 
Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide. Its Aerospace segment provides turbine propulsion engines, auxiliary power units, environmental control systems, electric power systems, engine systems and accessories, avionics systems, aircraft and obstruction lighting systems, inertial sensor systems, control products, space products and subsystems, management and technical services, and landing systems for aircraft manufacturers, airlines, business and general aviation, military, space and airport operations.
 
We currently have a Neutral recommendation on Honeywell.
 
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