Honeywell Wins $2.8 Billion Embraer Contract

On Monday, Honeywell (NYSE: HON  ) announced that it has won a $2.8 billion "lifetime" contract to provide avionics systems for the next generation of Embraer's (NYSE: ERJ  ) E-Jets.

The new generation of Embraer planes is not expected to enter service until 2018, but according to the companies, Honeywell will start supplying Primus Epic integrated avionics systems to run the navigation, communications, and cockpit display systems in the second generation of Embraer E-Jets beginning later this year. The Primus Epic system is already in use aboard Embraer's current generation of jets, including the Embraer 170 and 190.

The companies clarified that the $2.8 billion stated value of the contract is approximately what the deal will be worth to Honeywell over the course of the new generation of planes' development and use, and it includes the value of both OEM installation, and also aftermarket services that Honeywell will provide.

Honeywell shares closed 0.8% lower on Monday, at $68.56, but this was before news of the Embraer contract was released.


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