Honeywell International (NYSE: HON), the $80 billion behemoth conglomerate that manufactures a wide range of products from air purifiers for the home to aircraft engines, saw its stock trade lower by more than 8 percent on Friday.
The move is obviously notable given the company’s size but also because it is one among a small handful of companies that investors and analysts track to measure the state of the economy.
Honeywell announced an update to its third quarter outlook. The company now expects to earn around $1.60 per share in the third quarter on revenue of around $9.8 billion. This compares to the prior guidance range of $1.67 to $1.72 per share and $10.0 billion to $10.2 billion.
Investors are also concerned that the revised guidance implies a deterioration in business since mid-September when the company confirmed its outlook while speaking at the Morgan Stanley Laguna conference.
The company attributed its downward revised guidance to the separation of the Automation and Control Solutions reporting segment into two new reporting segments, the sale of a business unit, the spin-off of another unit and perhaps most notably, a lower outlook in certain business segments.
The company also noted that its guidance reflects the impact of lower shipments to its Business and General Aviation OEMs, continued program delays and completions in the domestic and international businesses within the defense and space segment.
Honeywell also issued fourth quarter guidance and expects to earn $1.74 to $1.78 in teh quarter which represents a 10 to 13 percent year-over-year increase. For the full fiscal year the company expects to earn $6.60 to $6.64 per share which represents an 8 to 9 percent year-over-year increase.
Of particular note, the company expects core organic sales to be lower by 1 to 2 percent for the full year.
Honeywell’s guidance warning wiped out the majority of the stock’s gains it recorded since the start of 2016. Shares are now higher by just more than 1.50 percent and higher by barely 6 percent over the past year.
Investor concern wasn’t limited to just Honeywell on Friday as shares of United Technologies (NYSE: UTX), a major player in the aerospace sector and competitor to Honeywell, dipped lower by around 2 percent.