CHARLOTTE, N.C., Oct. 23, 2025 /PRNewswire/ — Honeywell (NASDAQ: HON) today announced results for the third quarter that met or exceeded the company’s guidance. The company also raised its full-year organic growth and adjusted earnings per share guidance ranges and updated its free cash flow guidance range, including the impact of spinning off its advanced materials business.

The company reported third-quarter year-over-year sales growth of 7% and organic¹ sales growth of 6%, led by double-digit organic sales growth in commercial aftermarket and defense and space. Operating income decreased 6% and segment profit¹ increased 5% to $2.4 billion led by growth in Energy and Sustainability Solutions and Building Automation. Operating margin contracted 220 basis points to 16.9% and segment margin¹ contracted 50 basis points to 23.1%, meeting the high end of previous guidance. Earnings per share for the third quarter was $2.86, up 32% year over year, and adjusted earnings per share¹ was $2.82, up 9% year over year. Operating cash flow was $3.3 billion, up 65% year over year, and free cash flow¹ was $1.5 billion, down 16% year over year.

Vimal Kapur, chairman and chief executive officer of Honeywell, commented, “As we progressed toward separating into three industry-leading public companies, we drove strong financial results and unlocked new value creation opportunities during the third quarter. Increased orders across our business segments pushed the company’s total backlog to another record high and reinforced the benefit of the new, innovative solutions we are delivering for customers. All of this translated to us exceeding the high end of our guidance for both organic growth and adjusted earnings per share in the quarter.”

Kapur added, “Looking ahead, we are well positioned to continue building on our momentum and value creation efforts in the fourth quarter. Today, we are raising our full-year 2025 adjusted earnings per share guidance even while separating Solstice Advanced Materials at the end of October. We will remain focused on our compelling opportunities to deliver outcomes-based solutions to customers and are encouraged by the recent execution of our connected offerings through our Honeywell Forge platform, driving increased recurring revenue in our portfolio.”

As a result of the company’s third-quarter performance and management’s outlook for the remainder of the year, Honeywell updated its full-year sales, segment margin², adjusted earnings per share^2,3, and free cash flow¹ guidance. Guidance now includes the impact of the Solstice Advanced Materials spin-off, set for completion on October 30, 2025, which is expected to reduce full-year sales compared to the prior year by $0.7 billion, adjusted earnings per share^2,3 by $0.21, and free cash flow¹ by $0.2 billion.

Full-year sales are now expected to be $40.7 billion to $40.9 billion with organic¹ sales growth of approximately 6%. Segment margin² is expected to be in the range of 22.9% to 23.0%, with segment margin² expansion of 30 to 40 basis points year over year. Adjusted earnings per share^2,3 is now expected to be in the range of $10.60 to $10.70, up 10 cents at the midpoint from the prior guidance range. Operating cash flow is now expected to be in the range of $6.4 billion to $6.8 billion, with free cash flow¹ in the range of $5.2 billion to $5.6 billion.

Excluding the impact of the Bombardier agreement⁴ signed in the fourth quarter of 2024, the company expects organic sales¹ growth of approximately 5%, segment margin² down 40 to 30 basis points year over year, and adjusted earnings per share^2,3 up approximately 3% year over year. The company expects adjusted earnings per share growth of 5% to 6% when excluding both the impact of the Bombardier agreement⁴ and the October spin-off of Solstice Advanced Materials. A summary of the company’s full-year guidance changes can be found in Table 1.

Portfolio Transformation
In February, Honeywell announced that its Board of Directors concluded its comprehensive portfolio review and decided to pursue a separation of its Automation and Aerospace businesses. The planned separation, coupled with the upcoming spin of Solstice Advanced Materials, will result in three publicly-listed industry leaders and is on track to be fully completed in the second half of 2026.

In preparation for the separation, Honeywell took several steps during and subsequent to the quarter to accelerate value creation and further simplify its operations and balance sheet, including:

• Most recently, the company announced its reorganization into a simplified structure for its automation businesses with three reporting segments – Building Automation, Process Automation and Technology, and Industrial Automation – expected beginning first quarter 2026. The new segments will be focused on cohesive business models and aligned to the company’s post-separation automation pure-play strategy. The company will continue to report Aerospace Technologies as a reporting segment through the planned separation in the second half of 2026.
• In October, the company announced the divestiture of its Bendix-related legacy asbestos liabilities. In combination with the July termination of an indemnification and reimbursement agreement with Resideo related to legacy environmental liabilities for which Honeywell received $1.6 billion, these transactions will increase management capacity and free up capital to pursue new value-enhancing opportunities.
• In July, the company initiated an evaluation of strategic alternatives for its productivity solutions and services and warehouse and workflow solutions businesses as part of its process to simplify its portfolio.
• Also during the quarter, the company announced that Quantinuum raised over $600 million at a $10 billion pre-money valuation to fund the advance of quantum computing at scale.

Third-Quarter Performance
Honeywell sales for the third quarter were up 7% year over year on a reported basis and 6% on an organic¹ basis year over year. The third-quarter financial results can be found in Tables 2 and 3.

Aerospace Technologies sales for the third quarter grew 12% organically¹ year over year, led by strong performance in commercial aftermarket and defense and space. Commercial aftermarket sales increased 19% from the previous year, supported by ongoing supply chain unlock, with balanced growth across business jet and air transport end markets. Defense and space grew 10% year over year, its seventh consecutive quarter of double-digit growth, as global demand remains elevated. Commercial original equipment returned to growth in the quarter on higher shipment volumes. Overall backlog increased year over year as orders grew at a strong double-digit rate. Segment margin declined 160 basis points to 26.1% as commercial excellence and volume leverage were more than offset by cost inflation and the impact of acquisitions.

Industrial Automation sales for the third quarter grew 1% year over year on an organic basis and 2% sequentially excluding the effect of the May personal protective equipment divestiture. Sensing sales increased 6% from the prior year, growing for a fourth consecutive quarter on continued strength in healthcare sensors. Warehouse and workflow solutions grew 2% in the quarter with strong double-digit orders growth. Process solutions sales were flat year over year as growth in smart energy and thermal solutions was offset by challenging project demand. Productivity solutions and services declined 3%, driven by ongoing weakness in Europe. Segment margin contracted 150 basis points year over year to 18.8% as cost inflation more than offset commercial excellence and productivity actions.

Building Automation sales for the third quarter increased 7% organically¹ from the previous year. Building solutions delivered growth of 7%, led by continued gains in North America and the Middle East. Building products grew 6%, highlighted by a fourth consecutive quarter of double-digit growth in fire products. Orders increased both year over year and sequentially with balanced performance between building solutions and building products. Segment margin expanded 80 basis points from the prior year to 26.7%, supported by volume leverage and commercial excellence net of inflation.

Energy and Sustainability Solutions sales for the third quarter decreased 2% year over year on an organic basis. Advanced materials grew 5% in the quarter, driven by strength in refrigerants. UOP sales declined 13% as anticipated licensing delays and lower catalyst shipment volumes offset continued growth in sustainability solutions. Orders grew double digits in the quarter, with strong performance in both advanced materials and UOP. Segment margin remained flat year over year at 24.5% as a one-time U.S. government reimbursement of past legal costs and accretion from acquisitions were offset by cost inflation and volume deleverage in UOP.

Conference Call Details
Honeywell will discuss its third-quarter results and full-year 2025 guidance during an investor conference call starting at 8:30 a.m. Eastern Daylight Time today. A live webcast of the investor call as well as related presentation materials will be available through the Investor Relations section of the company’s website (www.honeywell.com/investor). A replay of the webcast will be available for 30 days following the presentation.

1- See additional information at the end of this release regarding non-GAAP financial measures.

2- Segment margin and adjusted EPS are non-GAAP financial measures. Management cannot reliably predict or estimate, without unreasonable effort, the impact and timing on future operating results arising from items excluded from segment margin and adjusted EPS. We therefore, do not present a guidance range, or a reconciliation to, the nearest GAAP financial measures of operating margin or EPS.

3- Adjusted EPS and adjusted EPS V% guidance excludes items identified in the non-GAAP reconciliation of adjusted EPS at the end of this release, and any potential future one-time items that we cannot reliably predict or estimate such as pension mark-to-market.

4- 4Q24 financial results include impact of the Bombardier Agreement (BBD) announced on December 2, 2024, resulting in a reduction to Sales of $0.4B, Net Income of $0.3B, and Cash Flow of $0.5B.

Source: Honeywell International Inc