Honeywell International Inc. (NASDAQ:HON) on Thursday reported mixed fourth-quarter 2025 results and provided guidance.
Details
The company posted adjusted earnings of $2.59 per share, topping analysts’ estimates of $2.54.
Revenue for the quarter rose 6% year over year (Y/Y) to $9.76 billion, missing the expectations of $9.85 billion.
Organic sales increased 11% Y/Y, aided by rising demand in the Aerospace and Building Automation segments.
Orders increased 23% Y/Y organically, aided by double-digit growth in Aerospace Technologies and Energy and Sustainability Solutions. This lifted the backlog to more than $37 billion.
Adjusted segment profit rose 23% Y/Y to $2.3 billion, or 2% when excluding the impact of the Bombardier agreement signed in the fourth quarter of 2024.
This was aided by growth in Aerospace Technologies and Building Automation, which led to a 240-basis-point expansion in adjusted segment margin to 22.8%.
However, margins declined 70 basis points excluding the Bombardier deal.
Operating cash flow was $1.24 billion, down 38% Y/Y, and free cash flow was $2.5 billion, up 48% Y/Y in the quarter.
Segment Performance
Almost all the segments witnessed growth. Aerospace Technologies generated $4.52 billion in sales, up 21% Y/Y organically. Adjusted segment margin expanded 620 basis points Y/Y to 26.5% on the impact of the prior year’s Bombardier agreement.
Building Automation posted $1.97 billion in sales with 8% Y/Y organic growth, and segment margin rose 20 basis points Y/Y to 27.0%, led by commercial excellence and volume leverage.
Industrial Automation reported $2.37 billion in sales, up 1% Y/Y on an organic basis. However, segment margins contracted 120 basis points Y/Y to 18.4%, on cost inflation.
Energy and Sustainability Solutions recorded $892 million in sales, decreased 7% Y/Y organically. However, segment margin contracted 300 basis points Y/Y to 23.7% owing to unfavorable mix from decline in catalyst volumes and cost inflation.
Outlook
For fiscal 2026, Honeywell expects adjusted EPS of $10.35–$10.65 versus analyst estimates of $10.38, and sales of $38.8 billion-$39.8 billion compared to the street view of $39.62 billion.
For the first quarter, the company projects adjusted EPS of $2.25–$2.35, compared to the street view of $2.34, and revenue of $9.1 billion-$9.4 billion, versus consensus of $9.29 billion.
Vimal Kapur, chairman and CEO of Honeywell, stated, “We exited 2025 with a record backlog of over $37 billion which positions us well for 2026. Building on this momentum, we now expect the separation of our automation and aerospace businesses to be completed in the third quarter of 2026. In preparation, this quarter we established our go-forward segment structure for Honeywell, built on complementary business models that will drive cross-portfolio synergies and accelerate profitable growth over the long term, and announced the leadership team for Honeywell Aerospace.”
Flexjet-Related Litigation Matters Settlement
On January 21, 2026, Honeywell and Flexjet disclosed a comprehensive agreement to fully resolve their ongoing litigation and related disputes involving StandardAero and Duncan Aviation.
As part of the settlement, the companies agreed to extend their aircraft engine maintenance partnership through 2035 and plan to rebuild their commercial relationship going forward.
HON Price Action: Honeywell shares were down 1.14% at $214.17 during premarket trading on Thursday, according to Benzinga Pro data.
Photo by josefkubes via Shutterstock
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