By Mark Maurer

Honeywell International Inc. is looking for acquisition targets, despite a sharp decline in revenue in the last quarter and a drop in demand in some business lines due to the coronavirus pandemic.

The industrial conglomerate plans to use its liquidity to scoop up other companies amid lower valuations, said finance chief Greg Lewis.

"We absolutely want to go and deploy capital," he said in an interview. "This is truly an opportunity for us to go do that."

Charlotte, N.C.-based Honeywell is targeting companies that could expand capabilities such as connected industrial software, known as "connected enterprise" offerings, possibly through artificial intelligence or technical solutions, Mr. Lewis said. Instead of building the technology itself, making outside investments sometimes makes more sense because it is faster, he said.

To support the M&A push, the company said last week it had hired Emily McNeal, formerly the CFO of e-commerce firm Flipkart, as the global head of M&A. The most recent global head of M&A, Brian Cook, left the company last year. George Koutsaftes served as interim M&A leader before the hiring of Ms. McNeal.

Honeywell acquired Rebellion Photonics, a provider of visual gas-monitoring services to oil companies, in December for an undisclosed amount.

Honeywell's sales dropped 19% in the quarter ended June 30. Heightened demand for the company's personal protective equipment failed to offset steep declines in the aerospace business due to limited air travel caused by the pandemic.

The company plans to reduce inventories for business lines such as aerospace and materials engineering that have experienced lower demand, Mr. Lewis said.

Honeywell had $15.1 billion in cash at the end of the second quarter. It issued $3 billion in long-term debt and drew down on a term loan to access $3 billion to strengthen its liquidity position.

The company sought to preserve capital during the spring, saving $750 million in the first half of the year through initiatives such as trimming general and administrative expenses in its back offices. It expects cost cuts to total $1.4 billion to $1.6 billion for the year.

By structurally reducing its costs, the company has the resources to look at new acquisitions, said Nicholas Heymann, an analyst at William Blair & Co. "They have opportunities to grow, but I would almost think they would buy some stock before they spend a lot of money on an acquisition," Mr. Heymann said.

Overall, the uncertainty around the pandemic has made overseeing finances for a massive company particularly difficult, Mr. Lewis said.

"Just managing through the challenges of the safety and well-being of your employees and the objectives of your business -- that's been at a level of intensity that I've not experienced before," Mr. Lewis said.

Write to Mark Maurer at mark.maurer@wsj.com