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)
