Honeywell International Inc. and Bombardier Inc. have resolved a legal dispute concerning the cost of jet engines manufactured by Honeywell for Bombardier. Concurrently, Honeywell has entered into a strategic partnership with Bombardier to supply cutting-edge avionics, propulsion, and satellite communications technologies for existing and future Bombardier aircraft models. In light of these developments, Honeywell has revised its financial forecasts for Q4 2023 and the fiscal year 2024.
Bombardier announced that it has successfully reached a settlement with Honeywell regarding the lawsuit initiated in 2016 in the Superior Court of Québec. This agreement also addresses any pending appeals before the Supreme Court of Canada. The details of the settlement remain confidential.
The initial lawsuit from Bombardier alleged that Honeywell failed to fulfill contractual obligations to reduce engine costs and offer competitive pricing, a claim Honeywell contested. A year ago, a Québec Superior Court judge mandated that Honeywell must negotiate in good faith with Bombardier to lower engine prices, prompting Honeywell to appeal the ruling.
As part of their newly formed strategic partnership, Honeywell and Bombardier will collaborate to enhance the technological capabilities of Bombardier aircraft, initially focusing on the Global and Challenger series. JetWave X certification is anticipated, alongside integrative advancements for both newly produced and retrofitted aircraft. Bombardier will access Honeywell's comprehensive L-Band satellite communications suite, facilitating future safety service enhancements.
While Honeywell anticipates short-term financial impacts from this commercial arrangement, the company is optimistic about its potential to deliver significant long-term shareholder value.
Honeywell has adjusted its fourth-quarter earnings guidance, projecting adjusted earnings per share to fall within $2.26 to $2.36, down from its prior estimate of $2.73 to $2.83. The revised quarterly sales forecast now stands at $9.8 billion to $10.0 billion, compared to the earlier estimate of $10.2 billion to $10.4 billion. Expectations from analysts, compiled by Thomson Reuters, previously pegged Honeywell’s earnings at $2.78 per share and revenue at $10.24 billion for the quarter.
Looking ahead to fiscal year 2024, Honeywell projects adjusted earnings per share ranging from $9.68 to $9.78, with anticipated sales between $38.2 billion and $38.4 billion. This is a downward revision from their earlier projection of $10.15 to $10.25 per share in earnings and $38.6 billion to $38.8 billion in sales. Wall Street analysts had forecasted earnings of $10.17 per share and revenues of $38.65 billion for the fiscal year.
