Honeywell Q4 Earnings Beat; Spinoff Accelerated
Honeywell Q4 earnings beat lifted FY2026 guidance and accelerated the Aerospace spinoff to Q3 2026, likely prompting heavier aerospace positioning.
KEY TAKEAWAYS
- Adjusted EPS beat at $2.59 versus $2.54 consensus, up 17.0% year-over-year.
- Adjusted sales were $10.1 billion, up 10.0% and at the high end of guidance.
- Raised FY2026 adjusted EPS guidance to $10.35-$10.65, implying about 6.0%-9.0% growth.
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Honeywell International Inc. (HON) reported Q4 earnings on Jan. 29, 2026, that exceeded estimates. The company raised its full-year 2026 outlook and accelerated the Honeywell Aerospace spinoff to the third quarter of 2026. A settlement with Flexjet reduced GAAP profit but did not affect adjusted earnings guidance.
Quarter Results and Guidance
For the quarter ended Dec. 31, 2025, Honeywell said adjusted sales reached $10.1 billion, up 10.0% year-over-year and at the high end of its guidance. Adjusted earnings per share (EPS) rose 17.0% to $2.59, beating the $2.54 consensus. GAAP sales were $9.8 billion, and GAAP EPS was $0.49, reflecting a charge related to the Flexjet settlement. The agreement extended the aircraft-engine maintenance contract through 2035 and involved related parties StandardAero and Duncan Aviation but did not affect adjusted EPS guidance.
Organic sales grew 11.0%, and organic orders increased 23.0%, driven by strong aftermarket and commercial activity. Backlog exceeded $37 billion at quarter-end. The company raised its full-year 2026 adjusted EPS guidance to a range of $10.35 to $10.65, implying 6.0% to 9.0% growth over 2025.
Aerospace Spinoff and Leadership
Honeywell accelerated the separation of its Aerospace unit to the third quarter of 2026 from the prior guidance of the second half of 2026. The spinoff remains subject to customary conditions, including SEC Form 10 filing and effectiveness, tax-free confirmation, regulatory approvals, and final board authorization.
The company named leadership for the standalone Honeywell Aerospace unit, appointing Jim Currier as CEO; Bob Buddecke as president of Electronic Solutions; Dave Marinick as president of Engines & Power Systems; and Rich DeGraff as president of Control Systems. The unit will be headquartered in Phoenix, Arizona, and will trade on Nasdaq under the ticker HONA. Jim Currier said, "These appointments position Honeywell Aerospace for long-term success."
Honeywell Aerospace generated more than $15 billion in sales in 2024, representing roughly 37.0% of Honeywell’s trailing-12-month revenue of $40.7 billion. Beginning in the first quarter of 2026, Honeywell will report four segments, including Aerospace Technologies, Building Automation, and Process Automation and Technology, aligning reporting with the separation.
The quarter’s backlog, strong order trends, upgraded guidance, and accelerated spinoff concentrate a sizable aerospace business into an independent public company, shifting investor exposure toward a pure-play aerospace supplier.
