Honeywell raises annual sales forecast to $20.0–20.1 billion after third-quarter results
Key Facts
Honeywell Technologies raised its 2026 sales forecast to $20.0–20.1 billion, according to its third-quarter earnings announcement published on October 22, in its first quarter after spinning off its aerospace business. The company also raised its annual adjusted earnings per share forecast to $8.40–8.45, alongside growth in adjusted earnings and improved operating performance. The sales forecast announced in July ranged from $19.8–20.0 billion for the full year. Adjusted earnings per share estimates in that update stood at $8.05–8.35. The new earnings forecast's lower end thus exceeded the previous range's upper end, while the previous sales forecast's upper end became the starting point of the new range.
Honeywell's third-quarter sales totaled $5.0 billion, a reported increase of 1% from the same period a year earlier, according to the company's statement. Organic sales growth was 7%, compared with the reported rate of revenue growth. By business, Building Automation sales rose 8% organically year on year during the quarter. The company attributed this performance to its fire and security businesses, alongside continued strength in services within the segment. In Process Automation and Technology, project sales rose 14%, driven by continued growth in liquefied natural gas and petrochemical projects. Backlog approached $19 billion, excluding the company's two divested businesses in Warehouse Solutions and Productivity Solutions and Services.
Adjusted earnings per share rose to $2.27 in the third quarter, according to the official earnings announcement. That represented growth of 34% from the same quarter a year earlier. By contrast, reported earnings per share from continuing operations totaled $2.40 during the period. That measure fell 20% year on year, moving in the opposite direction to adjusted earnings growth. The company attributed the decline to a one-time gain in the comparison year related to a separation agreement with "Resideo." Operating margin stood at 14.8% in the third quarter. The margin rose 640 basis points from its level in the corresponding period a year earlier.
Honeywell cited "productivity" among the factors supporting the improvement in operating earnings, according to the earnings statement. It added that eliminating stranded costs from spin-offs and divestitures contributed to the improvement during the quarter. Drivers also included pricing that more than offset inflation, supporting the company's operating performance. It cited improved sales volume leverage among the factors supporting earnings. On cash flow, quarterly free cash flow totaled $688 million, up 15% from the same period a year earlier. The company linked free cash flow growth to higher operating income and lower capital expenditure.
The results follow the completion of Honeywell's aerospace spin-off on June 29, 2026, according to the company's filing with the U.S. Securities and Exchange Commission. Following the spin-off, the company's businesses comprised Building Automation, Process Automation and Technology, and Industrial Automation. In the second quarter, at the end of which the spin-off was completed, Honeywell Technologies' sales excluding aerospace totaled $5.2 billion. Those sales recorded reported growth of 3% and organic growth of 4% from the same period a year earlier, according to the previous quarter's earnings announcement. Adjusted earnings per share excluding aerospace stood at $1.95 in that quarter.
For 2026, Honeywell raised its free cash flow forecast to about $2.1 billion. Its previous estimate for that measure was about $2.0 billion, according to the comparison in the earnings announcement. On dividends, the company announced a quarterly cash dividend of $0.70 per share in September. The dividend is payable to shareholders of record at the close of November 13, 2026, according to the company's dividend announcement. Payment is scheduled for December 4, 2026.