Honeywell Sees Strengthening Bizjet Sales

Honeywell is projecting an uptick in new business-jet equipment sales in the first quarter with "acceleration as we get deeper into the year," senior v-p and CFO Thomas Szlosek said during an earnings call last week. "We expect organic sales to improve as production rates increase across most of our OEM customers."

The company's aerospace segment saw fourth-quarter revenues increase 6 percent year-over-year—5 percent organically—to $3.9 billion, despite "slow demand in business jets, as expected," Szlosek said. Honeywell's aftermarket business was "stronger than anticipated," bolstered by higher-than-expected business aircraft spares sales, he added.

Looking ahead, demand for long-term service agreements from business aviation customers is expected to help drive another strong year in commercial aftermarket sales. Honeywell's market commentary builds on recent sentiments that the business-jet segment might finally be gaining momentum.

"With new aircraft models, an improving global economy, U.S. tax reform, and equity market strength, the backdrop for business jets looks about as good as anyone could hope for," Vertical Research Partners analyst Robert Stallard wrote in a recent research note. "After many false dawns, expectations remain subdued."