DBT Bureau
Pune, 24 Oct 2025
Honeywell reported third-quarter results that met or exceeded guidance and raised full-year organic growth, adjusted earnings per share, and free cash flow guidance, factoring in the spin-off of its advanced materials business.
The company reported third-quarter year-over-year sales growth of 7% and organic sales growth of 6%, driven by double-digit growth in commercial aftermarket and defense and space. Operating income decreased 6%, while segment profit increased 5% to $2.4 billion, led by Energy and Sustainability Solutions and Building Automation. Operating margin contracted 220 basis points to 16.9%, and segment margin contracted 50 basis points to 23.1%, meeting the high end of previous guidance. Earnings per share was $2.86, up 32% year over year; adjusted earnings per share was $2.82, up 9% year over year. Operating cash flow was $3.3 billion, up 65% year over year; free cash flow was $1.5 billion, down 16% year over year.
Vimal Kapur, CEO, commented, “As we progress toward separating into three public companies, we drove strong financial results and unlocked new value creation opportunities. Increased orders pushed total backlog to a record high, reinforcing the benefit of our innovative solutions.”
Honeywell updated its full-year guidance, including the Solstice Advanced Materials spin-off, expected to reduce full-year sales by $0.7 billion, adjusted EPS by $0.21, and free cash flow by $0.2 billion. Full-year sales are expected at $40.7–$40.9 billion with organic growth of ~6%. Segment margin is projected at 22.9–23.0%, adjusted EPS at $10.60–$10.70, operating cash flow at $6.4–$6.8 billion, and free cash flow at $5.2–$5.6 billion. Excluding the Bombardier agreement, organic sales growth is expected at ~5% and adjusted EPS growth at ~3%, rising to 5–6% when also excluding the Solstice spin-off.
Honeywell is advancing its portfolio transformation, with planned separations creating three industry-leading public companies by the second half of 2026. Recent steps include reorganizing automation businesses into three reporting segments, divesting Bendix-related legacy asbestos liabilities, evaluating strategic alternatives for productivity and warehouse businesses, and Quantinuum raising $600 million to advance quantum computing.
Third-Quarter Performance:
- Aerospace Technologies: Organic sales up 12% YoY, led by commercial aftermarket (+19%) and defense and space (+10%). Segment margin declined 160 bps to 26.1%.
- Industrial Automation: Organic sales up 1% YoY; sensing +6%, warehouse and workflow solutions +2%, productivity solutions down 3%. Segment margin contracted 150 bps to 18.8%.
- Building Automation: Organic sales up 7%; segment margin expanded 80 bps to 26.7%.
- Energy and Sustainability Solutions: Organic sales down 2%; advanced materials +5%, UOP -13%. Segment margin stable at 24.5%.
