Honeywell International (HON: 31.38, -1, -3.09%) posted a 38% drop in profit before Friday’s opening bell on lower demand for its products and lowered its earnings forecast.

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The maker of aerospace and transportation products reported earnings fell to $397 million, or 54 cents a share, in the first quarter, compared to $643 million, or 85 cents a share, the same period a year ago.

Revenue dropped 15% to $7.57 billion for the quarter. Analysts were expecting a revenue of $7.53 billion.

“While we anticipated a difficult first half of 2009, slow global economic conditions continue and we are adjusting our outlook accordingly,” said CEO Dave Cote in a statement.

Sales tumbled 14.6% to $7.57 billion as the sales of car plunge and travelers cut back on air travel.

The company, which makes auto equipment, took a major hit in its transportation division with sales skidding 41% to $756 million.

The company lowered its earning forecast to $2.85 to $3.20 a share down from $3.20 to $3.55. Analysts had been expecting earnings of $3.02 a share.

The company said it expects the global slowdown to continue and sees no recovery in the domestic housing market this year. Its division that makes products for commercial and residential buildings experienced a 6% drop in sales to $3 billion.

Shares of the company were trading down more than 1% after the opening bell. Honeywell shares are down about 47% over the past year.