Although second-quarter earnings per share, to be officially announced on July 18, are up 14% compared to 1999, they fell $0.03 per share short of expectations.

The profitability shortfall is said to be because of higher raw material costs in some businesses due to the tripling of oil prices, resulting in lower margins. The company also had higher debt-service costs due to higher interest rates and debt balances.

“We are implementing a series of aggressive cost-cutting initiatives across the company to address the shortfalls in our business performance,” said Michael R. Bonsignore, chairman and ceo.

A company spokesperson said that the job cuts would come from a hiring freeze, attrition, and retirements. Honeywell will also merge its polymers and specialty chemicals businesses and a close a chip packaging operation, and plans to sell its pharmaceuticals and friction materials businesses.

Referring to the Honeywell/ AlliedSignal merger, Bonsignore said, “While some of our businesses continue to face tough challenges, we have not encountered any unexpected issues relating to the merger integration process and remain on course to achieving our goal of $250 million of integration savings this year.”

He added, “We also have a significant global installed base in our Home and Building Control business, where we are focusing our growth opportunities on an integrated, web-enabled offering of comfort, fire, and security solutions.”