Intermec acquisition drag on Honeywell profits

Honeywell moving into radio frequency identification (RFID)

Can I see some RFID?

Honeywell International forecast a fiscal 2013 profit mostly below estimates, partly because of a charge from its Intermec acquisition announced on Monday, and said it expected slow economic growth next year. The company, whose many industrial products include cockpit electronics and automotive turbochargers, said it would buy mobile computing device maker Intermec for $600 million, or $10 per share.

Honeywell said the deal, which offers Intermec shareholders a 25% premium from Friday's closing stock price, would hurt 2013 earnings by $0.03-0.04 per share. It forecast a 2013 profit of $4.75-4.95 per share, excluding items, while analysts on average expect $4.95. Honeywell said it expected revenue of $39.0-39.5 billion for 2013, which compares with analysts' expectations of $39.42 billion.

“While Intermec strengthens our core scanning and mobile computing business, it opens up entirely new opportunities in RFID (radio frequency identification), voice solutions and barcode and receipt printing segments that we currently don't serve,” said Roger Fradin, CEO of Honeywell's automation and control products unit.

Honeywell International (HON : NYSE : US$61.86), Net Change: -0.11, % Change: -0.18%, Volume: 2,945,121

Intermec (IN : NYSE : US$9.83), Net Change: 1.85, % Change: 23.18%, Volume: 17,873,637

About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

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