Honeywell, which owns or has a stake in multiple defense-nuclear site-management contractors, did better than it expected in the first quarter of 2020, but sees economic headwinds due to the ongoing COVID-19 pandemic.
Quarterly net income for the period ended March 30 rose to more than $1.5 million, or $2.21 a share, from around $1.4 million, or $1.92 a share, in the 2019 quarter. Quarterly sales, however, fell to less than $8.5 billion from nearly $8.9 billion in 2019, with lower volumes and foreign currency losses handily offsetting better prices, according to the company’s latest 10-Q filing with the Securities and Exchange Commission.
Despite the COVID-19 pandemic, “government defense budgets remain intact and we expect continued growth in Defense and Space,” Greg Lewis, Honeywell’s chief financial officer, said on Friday’s earnings call with analysts.
However, Lewis said, the tailspin in commercial markets will likely offset the mitigating effect of steady defense business from the government. Among other things, Honeywell is a supplier for Boeing Co.’s 737 MAX aircraft, which remains grounded after two fatal crashes in 2018 and 2019.
Like many other listed companies, Honeywell suspended its earnings guidance for the time being, citing the unpredictability of the ongoing COVID-19 crisis, for which the company sees no end in sight. Honeywell had forecast earnings of $2.02 to $2.07 a share for the first quarter, which it handily beat.
Honeywell is the owner or partner in contractors, organized as limited liability corporations, that manage four Department of Energy facilities:
- Honeywell Federal Manufacturing & Technologies, a Honeywell subsidiary at the Kansas City National Security Campus in Missouri.
- National Technology and Engineering Solutions of Sandia, a Honeywell subsidiary at the Sandia National Laboratories in New Mexico.
- Mission Support and Test Services, a Honeywell-majority team with Jacobs and Huntington Ingalls at the Nevada National Security Site.
- Savannah River Nuclear Solutions, a Honeywell-minority team with Fluor and Huntington Ingalls at the Savannah River Site in South Carolina.