(Reuters) - Aero parts supplier Honeywell International Inc (HON.N) lowered the upper end of its 2016 sales and profit forecast range, partly due to fewer business jet and general aviation shipments in its aerospace division.
Honeywell’s shares were down 4.5 percent at $110.40 in extended trading on Thursday.
Honeywell had to pay higher incentives to commercial planemakers in the second quarter to select its equipment. The company was also hurt by lower demand for helicopters due to weak energy markets.
The company said on Thursday it also experienced continued program delays in its defense and space division, part of its aerospace business, its biggest unit.
Honeywell expects 2016 earnings per share of $6.60-$6.64, down from its previous forecast of $6.60-$6.70.
Honeywell’s core organic sales are now expected to be down 1-2 percent for 2016, compared with a 1 percent decline it had estimated previously.
Honeywell said the revised forecast also reflected the separation of its automation and control solutions business into two new reporting segments - home and building technologies and safety and productivity solutions – and the impact of acquisitions and divestitures.
The company also said it had recast results for the first and second quarter to reflect the adoption of new accounting standards for stock compensation, ahead of the mandatory effective date in 2017.
The company has recorded tax benefits of 3 cents in the first quarter and 4 cents in the second quarter.
Honeywell said that benefits from the accounting change and sale of the Honeywell Technology Solutions government services business will used to fund restructuring and other charges in the third quarter.
Up to Thursday's close, Honeywell's stock has risen 12.3 percent this year, compared with a 5.7 percent increase in the S&P 500 index .SPX.
Reporting by Ankit Ajmera in Bengaluru; Editing by Shounak Dasgupta and Don Sebastian