Honeywell Technologies Q3 2026: EPS beats, guidance lifted after aerospace spin

Honeywell Technologies reported adjusted earnings per share of $2.27 for its third quarter, beating expectations. The result extends the company's streak of beating EPS expectations to five consecutive quarters and marks the first earnings report since Honeywell completed its separation from its aerospace business.

Segment profit surged 23% to $1.06 billion on pricing actions that more than offset inflation, cost elimination, and volume leverage across the business. Organic sales grew 7%, above the targets the company set at its June Investor Day, while reported revenue came in slightly below consensus on the impact of divestitures.

Two of three business segments posted strong growth, with Building Automation up 8% on fire and security demand and Process Automation and Technology up 16% on LNG and petrochemical project activity. Industrial Automation revenue fell 23%, weighed down by industry-wide meter deployment deferrals and the divestiture of its Warehouse and Workflow Solutions and Productivity Solutions and Services businesses during the quarter.

Management raised full-year 2026 adjusted EPS guidance to $8.40 to $8.45, and also lifted its organic growth and free cash flow outlooks. CEO Vimal Kapur noted that adjusted EPS rose 34% in the quarter, well ahead of the company's own expectations, and said the result gives him confidence in the company's ability to deliver on its 2029 targets.

Backlog increased 7% year over year to nearly $19 billion, providing a visible runway for future revenue, with free cash flow for the quarter up 15%. Risks flagged by management include equity losses from its Quantinuum investment, along with macroeconomic pressures from tariffs, foreign currency fluctuations, and geopolitical uncertainty.