09:08 AM EST, 12/16/2024 (MT Newswires) -- Honeywell International ( HON ) on Monday said it is evaluating a potential separation of its aerospace business as part of the industrial conglomerate's efforts to optimize its portfolio.

The company said its board of directors continues to explore strategic alternatives to unlock shareholder value and has made "significant progress" so far. Honeywell ( HON ) aims to provide an update on the matter when it discloses its fourth-quarter earnings report. The stock gained 2.4% in premarket activity.

"Since aligning our business this past January to three compelling megatrends -- automation, the future of aviation and energy transition -- we have been moving swiftly and decisively to optimize the Honeywell ( HON ) portfolio to deliver superior growth and drive incremental shareholder value," Chief Executive Vimal Kapur said in a statement. "At the same time, we have been evaluating more transformational changes."

In November, activist investor Elliott Investment Management disclosed a more than $5 billion investment in Honeywell ( HON ) and urged the company to split into two standalone entities to separate its aerospace and automation businesses.

"Elliott welcomes Honeywell's ( HON ) announcement today of its ongoing review of strategic alternatives, including the separation of its Aerospace business," Elliott Partner Marc Steinberg and Managing Partner Jesse Cohn said in a separate statement Monday. "We believe the portfolio transformation Vimal and his team are leading represents the right course for Honeywell ( HON ), and we look forward to the upcoming completion of the review and to supporting Honeywell ( HON ) as it implements the necessary steps to realize its full value."

Honeywell ( HON ) disclosed plans in October to spin off its advanced materials business into a separate publicly traded company. Last month, it agreed to offload its personal protective equipment business, part of the industrial automation segment, to a portfolio company of private equity firm Odyssey Investment Partners in an all-cash deal of about $1.33 billion.

The company has completed a number of acquisitions over the past 12 months to support its increased focus on automation, aviation and energy transition, including Carrier's Global Access Solutions, Civitanavi, CAES and Air Products and Chemicals' (APD) liquefied natural gas business.

"Following the portfolio enhancements announced earlier this year, Honeywell ( HON ) is now well-positioned for significant transformational alternatives, and we are continuing our deeper, more granular exploration of their feasibility and possible timing," Kapur said Monday.

Earlier in December, Honeywell ( HON ) lowered its fourth-quarter and full-year outlook after striking an agreement to provide aviation-related technology to Canadian aircraft manufacturer Bombardier. The investments required for the deal prompted the company to revise its guidance.