Honeywell Unveils Cautious 2013 View, $600M Buyout of Intermec


Manufacturing conglomerate Honeywell (NYSE:HON) issued a tepid 2013 outlook on Monday and also unveiled a $600 million acquisition of mobile computing device maker Intermec.

While Honeywell reaffirmed its guidance for the current year, the company’s guidance for next year would miss Wall Street’s expectations.

The Morristown, N.J.-based company said it expects to grow sales 4% to 5% next year to $39 billion to $39.5 billion. The midpoint of that range, $39.25 billion, is below forecasts from analysts for $39.42 billion. Organic sales are expected to inch up 1% to 3%.

Honeywell also projected 2013 non-GAAP EPS of $4.75 to $4.95. The high end of that forecast would only match the Street’s view of $4.95.

“While we're planning for a continued slow-growth macro environment in 2013, we will remain flexible and adhere to our disciplined focus on growth, efficiency and competitiveness, driving sales and margins higher,” CEO Dave Cote said in a statement.

For 2012, Honeywell sees sales of EPS of $4.47 on sales of approximately $37.5 billion. Analysts have been calling for EPS of $4.47 on revenue of $37.6 billion.

Meanwhile, Honeywell announced a $600 million deal to acquire Intermec, an Everett, Wash.-based company that generated sales of $848 million last year.

The transaction values Intermec at $10 a share, representing a 25% premium on Intermec’s Friday close at $7.98. It also marks a 48% premium from Intermec’s close on November 1, the day before it announced hiring Bank of America Merrill Lynch (NYSE:BAC) to explore strategic options.

Honeywell said it expects the acquisition will bolster its strength in rugged mobile computing devices, boosting the company’s bottom line in 2013. The deal, which is seen closing by the second quarter of next year, is expected to hurt 2013 EPS by 3 to 4 cents.

“The agreement with Honeywell not only maximizes value for our stockholders, it combines our history of innovation and engineering expertise, global reach and leading products and solutions with the significant global scale and resources of Honeywell,” Intermec interim CEO Allen Lauer said in a separate statement.

Intermec said it is suspending its search for a permanent CEO in light of the deal.

Shares of Intermec rallied 22.68% to $9.80 Monday morning, while Honeywell dipped 0.31% to $61.78.