Honeywell expects $470 million charge from Flexjet settlement

By Aatreyee Dasgupta

Dec ⁠22 (Reuters) - Honeywell ⁠said ‍on Monday it expects to record a one-time charge of about $470 million in the fourth ‍quarter related to a potential settlement in litigation ​linked to private aviation company Flexjet.

Honeywell shares fell 1.2% in ​afternoon trading.

Flexjet sued Honeywell in March 2023, alleging Honeywell breached an aircraft engine maintenance services agreement and sought liquidated damages tied ​to delayed engine repairs.

It said the damages continue to accrue monthly for engines awaiting repair.

In an ​October filing, Honeywell said a New York state court dismissed its defense and ‌found the liquidated damages provision enforceable.

The company also said Flexjet claimed it was entitled ​to damages of at least $500 ⁠million related to the agreement, plus additional damages substantially in excess of that amount.

"While ‌a $470 million dollar settlement could appear to be excessive, it is a calculated legal and economic decision by Honeywell's ‌team in light of the posture of the case and the ‌potential for damages exceeding $1 billion dollars," said Jonathan Nelson, partner at New York-based law firm Dorf, Nelson & Zauderer.

Honeywell also lowered ‍its 2025 adjusted profit forecast to $9.70 to $9.80 per share from $10.60 to $10.70, as it plans ⁠to report its Advanced Materials unit as discontinued operations starting in the fourth quarter of 2025 after the spinoff of Solstice Advanced Materials.

(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Tasim Zahid)

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