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Honeywell Wins $37M Airbus Deal - Analyst Blog

Posted: 6/28/2013 1:30:00 PM
Referenced Stocks: CODI;HON;HUWHY;ITT

Diversified technology and manufacturing company, Honeywell International Inc. ( HON ), recently won a $37 million contract to build a service power facility for Airbus' new assembly site in Mobile, Ala. Honeywell expects to complete the construction of the powerhouse by mid-2014; in line with the standards certified by LEED (Leadership in Energy and Environmental Design).

Along with the design and construction of the facility, Honeywell has also entered into a 10-year service agreement to provide service and maintenance for the assembly site. Moreover, to minimize disruptions to Airbus operations, five operators will provide day-to-day support. Additionally, the company proposes to hire contractors from the region to build the facility.

The new power management facility will be in charge of distribution and control of utilities like electricity, water, heating and cooling to Airbus' Future A320 Aircraft Assembly line. Additionally, the facility will also provide backup generation, compressed air and sewage handling. Moreover, Honeywell will provide a guarantee to optimally maintain and operate all the systems.

The contract has been awarded to the Aerospace segment of Honeywell which has a long standing relationship with Airbus. The Aerospace segment, which contributed 31% to total revenue during the last reported quarter, offers turbine propulsion engines, auxiliary power units, electric power systems, engine systems and accessories, aircraft hardware, avionics systems, aircraft and obstruction lighting systems, inertial sensor, and landing systems for aircraft manufacturers, airlines, aircraft operators, military services, and defense and space contractors.

Honeywell believes that its expertise in designing, building and maintaining complex, large-scale manufacturing plants will ensure operational excellence of Airbus' new facility in the long term.

Honeywell currently holds a Zacks Rank #2 (Buy). Other companies in the industry worth mentioning include ITT Corporation ( ITT ) and Compass Diversified Holdings ( CODI ), and Hutchison Whampoa Ltd. ( HUWHY ), each carrying a Zacks Rank #2 (Buy).

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