Honeywell Aerospace to Invest About $500 Million to Expand Arizona Facility
Key Facts
Honeywell Aerospace plans to invest about $500 million to expand its existing manufacturing facility in Tempe, Arizona, adding 300,000 square feet, according to its third-quarter results presentation published on October 28, 2026. The company aims to increase capacity and vertical integration across its control systems portfolio while supporting commercial aviation and defense programs. Chief Executive Jim Currier said, "Demand for our solutions remains strong," citing 9% order growth over the past twelve months. The move comes as the backlog reached $19.324 billion at the end of the third quarter, up 12% from a year earlier. The company expects the facility to open in late 2028, delaying the impact of the new capacity until after construction and fit-out.
The expansion will add in-house complex machining capacity, an area where the company said its supplier base is currently constrained. Honeywell said greater vertical integration will strengthen supply-chain flexibility and reduce reliance on suppliers for complex manufacturing operations. The facility’s design includes modular robotics, automated inspection, AI-enabled production optimization, digital twins and an interconnected end-to-end digital system. The company says these capabilities will support production of control systems and increase integration across the facility. The additional capacity will also provide room to produce priority defense technologies included in a framework supplier agreement the company signed with the Department of War in March 2026.
The company linked the investment to its Assure electromechanical actuation systems and Attune vapor-cycle cooling systems, which it said had won program awards worth $15 billion as of the presentation. These systems serve platforms in the commercial aviation and defense sectors, according to the company. Honeywell Aerospace posted sales of $4.644 billion in the third quarter, up 2% year over year. The backlog rose to $19.324 billion from $17.255 billion a year earlier, according to the results statement. These figures provide context for the scale of demand the new facility is intended to serve, while its expected opening is in late 2028.
Sales growth varied across the company’s businesses, while supplies of some components continued to constrain the pace of execution. Commercial aviation aftermarket sales rose 2% to $2.126 billion. The company said underlying demand was healthy, but the availability of mechanical components limited growth in the business. By contrast, commercial aviation original equipment sales increased 7% on a reported basis and 8% organically to $690 million. The company attributed growth in the business to higher commercial aircraft build rates and increased volumes of optional equipment. The picture shows the expansion targeting some manufacturing and supply constraints as aftermarket growth remained limited by component availability.
In the defense and space segment, sales increased 1% to $1.828 billion in the third quarter. The company said growth related to the CAES and Civitanavi acquisitions partly offset lower international volumes, which were linked to supply constraints and the termination of a non-aviation government program. Adjusted operating profit rose 1%, including a net benefit of about $50 million from tariff refunds under the International Emergency Economic Powers Act. The company said additional costs required to operate as an independent public company weighed on earnings. The third-quarter results were Honeywell Aerospace’s first quarterly report as an independent public company, according to its statement.
The company raised its fiscal 2026 adjusted earnings-per-share outlook to $7.85–8.00, from a previous range of $7.60–7.90. It also revised its second-half 2026 free cash flow outlook to $1.2–1.4 billion, from $1.0–1.5 billion. Currier said the company expects higher sales and production growth starting in 2027, as it continues to qualify additional material sources and supplier performance indicators improve. In after-hours trading on October 28, the stock fell 4% after the results, according to Investing.com, as investors focused on cost pressures. The company also announced its first quarterly dividend as an independent company, at $0.40 per share, payable on December 4, 2026, to shareholders of record at the close of November 13, 2026.