Setting aside the effect of major spinoffs in 2017, Honeywell, a major player in U.S. nuclear weapons and waste programs, saw sizable sales and earnings boosts last year, while profits rose in the Aerospace segment that houses two of its big Department of Energy contracts.
Excluding the effects of the spinoffs, Honeywell’s full-year per-share earnings rose 10 percent year over year to $7.11 as sales ticked up 3 percent to $40.5 billion, the company said in a Friday press release. In a nonrecurring hit to net income, the company spun off its homes, distribution, and transportation businesses last year, which caused the bottom line to sag 65 percent to $1.7 billion.
In a vote of confidence for its now-complete restructuring, Honeywell boosted its 2018 earnings guidance to between $7.75 a share and $8 a share from a range of $7.55 to $7.80 a share.
In the Aerospace business segment, meanwhile, annual profit rose about 10 percent to more than $3 billion, even as revenue stayed flat at about $14.7 billion.
On a quarterly basis, and again excluding the effects of the spinoff, per-share earnings rose 6 percent to $1.85 as sales climbed 9 percent to about $10.8 billion, Honeywell said. Aerospace’s quarterly profit jumped more than 20 percent to about $890 million as segment sales rose 6 percent to almost $4 billion in the quarter ended Dec. 31.
Honeywell has two wholly owned subsidiaries managing major sites for the Department of Energy’s National Nuclear Security Administration: the semiautonomous steward of U.S. nuclear warheads.
The first, Honeywell Federal Manufacturing & Technologies, manages the Kansas City National Security Complex under a contract awarded in 2015 and worth more than $8 billion a year over 10 years, including options. The Missouri facility manufactures non-nuclear parts for nuclear weapons.
The second, National Technology and Engineering Solutions of Sandia, last year started work on a contract to manage the NNSA’s Sandia National Laboratories in New Mexico. The weapons-lab management pact is worth about $2.5 billion a year over 10 years, including options.
As a teammate, Honeywell is part of Mission Support and Test Services: the management and operations contractor for the Nevada National Security Site. That contract, shared with Jacobs and Huntington Ingalls, is worth up to $5 billion over 10 years, including options. The Nevada site conducts non-nuclear explosive tests and nuclear chemistry tests to ensure U.S. weapons are still as destructive as advertised.
Honeywell also plays in the Department of Energy’s Cold War nuclear-cleanup business as part of a joint venture with Bechtel and BWX Technologies called Savannah River EcoManagement. Last fall, the triumverate won a $4.7 billion, 10-year contract for liquid waste management services at the agency’s Savannah River Site in South Carolina. That contract, though, has been protested by the two losing bidding teams.
