The Law Offices of Frank R. Cruz opened a securities fraud investigation into Honeywell Aerospace after the company's shares plunged 11 percent following a forecast cut. The probe follows the company's first earnings report as a standalone entity, which missed consensus estimates on both revenue and EPS.
The Law Offices of Frank R. Cruz opened a securities fraud investigation into Honeywell Aerospace Inc. (NASDAQ: HONA) on Thursday, one day after the company's shares plunged 11 percent on a forecast cut.
"IF YOU ARE AN INVESTOR WHO LOST MONEY ON HONEYWELL AEROSPACE, INC. (HONA), CLICK HERE TO INQUIRE ABOUT POTENTIALLY PURSUING A CLAIM TO RECOVER YOUR LOSS," the firm said, alleging possible violations of federal securities laws.
The probe follows Honeywell Aerospace's first earnings report since splitting from Honeywell Technologies in late June. Second-quarter revenue rose 5.4 percent year over year to $4.52 billion, missing the LSEG-compiled consensus of $4.6 billion. Adjusted earnings per share fell 32 percent to $1.87, below the $2.11 estimate. The extended-trading decline, on top of a 6 percent regular-session selloff, brought shares to $182, a new low as a standalone company.
Management cut full-year organic sales growth guidance to 4-5 percent from 7-9 percent and lowered pro-forma standalone adjusted EBIT to $4.35-$4.45 billion from $4.65-$4.75 billion. Pro-forma standalone adjusted EPS guidance of $7.60-$7.90 came in well below the Street consensus of $8.90. CEO Jim Currier attributed the shortfall to supply chain constraints, saying "I underestimated how long it would take to implement and see traction from the corrective measures." The company works with more than 3,000 suppliers, with 98 percent "performing exceptionally well" and the remaining 2 percent causing bottlenecks, CFO Josh Kepsen said.
Segment results were mixed. Electronic Solutions sales grew 8 percent year over year, driven by defense, space, and commercial aftermarket strength, though segment adjusted EBIT fell 3 percent on higher costs. Engines and Power Systems revenue rose 1 percent, with segment profits down 32 percent. Control Systems sales increased 7 percent, with adjusted EBIT up 8 percent.
The fraud investigation adds legal risk to a stock already under pressure. Honeywell Aerospace reported 8 percent order growth and $15 billion in new wins year to date, but the forecast cut has raised questions about management credibility. The company had multiple opportunities to moderate Wall Street expectations before the earnings report, including at its investor day in early June and during the separation process. Management reaffirmed its 2030 targets, though the reduced 2026 guidance makes those long-term goals harder to achieve. The company said it is moving with urgency to fix the supply chain issues, which will require elevated investment and could pressure margins for a period. Investors will watch for any SEC inquiry or additional shareholder lawsuits as the investigation progresses.
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