Why Honeywell is considering shedding one of its divisions

Honeywell says that it may jettison its aerospace division from the conglomerate, sending shares up more than 2% before the opening bell Monday on Wall Street.

The announcement arrives about one month after Elliott Investment Management revealed a stake of more than $5 billion in the aerospace, automation and materials company.

In a letter sent to Honeywell’s board, Elliott says that the company needs to simplify its structure as it deals with uneven execution, inconsistent financial results and an underperforming stock price.

Elliott wants the Charlotte, North Carolina, company to separate its automation and aerospace businesses.

The board of Honeywell International Inc. has been exploring strategic options for the company since earlier this year. It has said there will be an update in late January when it releases its fourth-quarter earnings results.

A number of American conglomerates such as General Electric and Dow Chemical have already broken up their companies to become more nimble. Shares of Honeywell have trailed the S&P 500 index by a wide margin this year.

The company, which makes everything from eye solution to barcode readers, is already shifting. Since last December, Honeywell announced plans to spin off its advanced materials business, entered an agreement to sell its personal protective equipment business, and has made several acquisitions.