Honeywell Updates Guidance, Shares Pull Back

Diversified manufacturer Honeywell (NYSE:HON) stood by its 2010 financial guidance on Wednesday and projected 2011 profits will climb by as much as 24%, but that wasn’t enough to prevent its red-hot stock from sinking 2%.

Morristown, N.J.-based Honeywell said it sees 2011 EPS of $3.50 to $3.70, the midpoint of which would trail the Street’s view of $3.63. It also projected 2011 revenue of $34 billion to $36 billion.

For the current year, Honeywell reaffirmed its outlook for non-GAAP EPS of $2.98 on free cash flow from operations of $3.3 billion to $3.5 billion and sales of about $33 billion.

“We're clearly growing faster than the markets we serve, and combined with the improved outlook for the global economy, we're confident in our expectations for higher revenues, segment margin expansion, strong cash flow, and double-digit earnings growth in 2011,” Honeywell CEODavid Cote said in a statement.

Cote said Honeywell’s short-cycle businesses like turbochargers led the way in 2010 with a “robust recovery off low 2009 levels.” He added that its longer cycle businesses, such as commercial aerospace and refining technologies, “are showing meaningful signs of improvement.”

Shareholders weren’t pleased with the new outlook, sending Honeywell’s stock down 2% to $51.50. The stock is still up nearly 10% over the past month and 34% year-to-date.

Honeywell released its updated guidance ahead of a conference call with investors Wednesday morning.