Honeywell Aerospace reports third quarter results
Honeywell Aerospace Inc. (HONA) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Contacts: Media Investor Relations Brian Grace Sean Meakim (602) 897-0205 (623) 223-5980 Brian.Grace@honeywellaerospace.us Sean.Meakim@honeywellaerospace.us Honeywell Aerospace reports third quarter results; updates 2026 outlook • Sales of $4.6 billion, reported and
How this was made
The 30-second read
Why it matters
The earnings beat and updated guidance suggest stronger demand and operational execution, supporting a bullish stance.
Market read
The release provides fresh earnings data and forward guidance that can move the stock and influence sector sentiment.
What to watch
Potential headwinds from mechanical component shortages and higher costs as an independent company.
Honeywell Aerospace reports third quarter results; updates 2026 outlook
Third-quarter sales increased 2% and adjusted EBIT increased 1%, with backlog up 12% and trailing twelve-month orders up 9%. The company maintained organic sales growth guidance, raised adjusted EPS and second-half free-cash-flow guidance, and narrowed adjusted EBIT guidance, while mechanical supplier constraints continued to limit output and higher costs and mix weighed on parts of the portfolio.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| 3Q 2026 product salesGAAP | $2.69B | – | – |
| 3Q 2026 service salesGAAP | $1.95B | – | – |
| 3Q 2026 net salesGAAP | $4.64B | – | 2% |
| 3Q 2026 organic sales percent changenon-GAAP | 2 % | – | 2 % |
| 3Q 2026 total cost of products and services soldGAAP | $2.93B | – | – |
| 3Q 2026 research and development expensesGAAP | $216M | – | – |
| 3Q 2026 selling, general and administrative expensesGAAP | $471M | – | – |
| 3Q 2026 interest expense (income), netGAAP | $187M | – | – |
| 3Q 2026 other (income) expense, netGAAP | $ (60) | – | – |
| 3Q 2026 income before taxesGAAP | $901M | – | – |
| 3Q 2026 income tax expenseGAAP | $164M | – | – |
| 3Q 2026 net incomeGAAP | $737M | – | 13% |
| 3Q 2026 net income attributable to AerospaceGAAP | $726M | – | – |
| 3Q 2026 earnings per share of common stock - basicGAAP | $ 2.29 | – | – |
| 3Q 2026 earnings per share of common stock - dilutedGAAP | $ 2.29 | – | – |
| 3Q 2026 adjusted EBITnon-GAAP | $1.16B | – | 1% |
| 3Q 2026 adjusted earnings per share of common stock - dilutednon-GAAP | $ 2.21 | – | – |
| 3Q 2026 cash provided by operating activitiesGAAP | $668M | – | – |
| 3Q 2026 capital expendituresGAAP | −$168M | – | – |
| 3Q 2026 free cash flownon-GAAP | $500M | – | – |
| 3Q 2026 backlogother | $19.32B | – | 12% |
| Trailing twelve-month ordersother | 9% | – | 9% |
| Nine Months Ended September 26, 2026 net salesGAAP | $13.52B | – | – |
| Nine Months Ended September 26, 2026 net incomeGAAP | $1.64B | – | – |
| Nine Months Ended September 26, 2026 net income attributable to AerospaceGAAP | $1.61B | – | – |
| Nine Months Ended September 26, 2026 earnings per share of common stock - basicGAAP | $ 5.07 | – | – |
| Nine Months Ended September 26, 2026 earnings per share of common stock - dilutedGAAP | $ 5.06 | – | – |
| Nine Months Ended September 26, 2026 total segment profitnon-GAAP | $3.25B | – | – |
| Nine Months Ended September 26, 2026 cash provided by operating activitiesGAAP | $1.01B | – | – |
| Nine Months Ended September 26, 2026 capital expendituresGAAP | −$428M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Electronic SolutionsStrength in Commercial Original Equipment and Defense and Space. | $1.78B | – | 4% |
| Engines and Power SystemsHigher Commercial Aftermarket volumes. | $1.51B | – | 3% |
| Control SystemsDefense and Space growth was offset by a decline in Commercial Aftermarket. | $1.34B | – | —% |
| Commercial Original EquipmentCommercial air transport build rates and selectable equipment volumes increased. | $700M | – | 7% |
| Commercial AftermarketHealthy underlying demand was limited by mechanical component availability. | $2.1B | – | 2% |
| Defense and SpaceGrowth led by the CAES and Civitanavi acquisitions was partially offset by lower international volumes due to supply constraints and the wind-down of a non-aerospace restricted government program. | $1.8B | – | 1% |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Full-year 2026 and second half 2026 outlook
- RevenueOrganic growth 4% - 5%
- NotePro forma standalone adjusted EBIT: $4.375B - $4.425B
- NoteYear-over-year growth: Up 1% - 2%
- NotePro forma standalone adjusted earnings per share: $7.85 - $8.00
- NoteSecond half free cash flow: $1.2B - $1.4B
Capital returns
- Quarterly cash dividend of $0.40 per share of common stock.
- Dividend payable on December 4, 2026, to shareholders of record as of the close of business on November 13, 2026.
What drove it
- Backlog grew to $19.3 billion at quarter end, up 12% from the prior year.
- Trailing twelve-month orders were up 9%, led by Defense and Space.
- Commercial Original Equipment benefited from commercial air transport build rates and selectable equipment volumes.
- Electronic Solutions segment adjusted EBIT increased 11% as tariff refunds and pricing more than offset unfavorable mix and higher costs.
- Adjusted EBIT included an approximately $50 million net benefit from International Emergency Economic Powers Act tariff refunds.
- Year to date, the company secured more than $20 billion in new wins, measured as estimated lifetime value.
Concerns
- Mechanical component availability limited Commercial Aftermarket sales growth.
- A small number of mechanical suppliers were currently limiting output growth.
- Engines and Power Systems segment adjusted EBIT decreased 16% as unfavorable mix and higher costs more than offset price and the impact of tariff refunds.
- Defense and Space sales were partly offset by lower international volumes due to supply constraints and the wind-down of a non-aerospace restricted government program.
- New costs necessary as an independent public company affected adjusted EBIT.
What to watch
- Progress with pacing suppliers and qualification of additional material sources.
- Delivery of higher sales and output growth in 2027 and beyond, as described by management.
- Commercial Aftermarket volume and mechanical component availability.
- Execution of the 300,000 square foot Tempe, Arizona manufacturing expansion expected to open in late 2028.
- Full-year delivery against organic growth of 4% - 5%, pro forma standalone adjusted EBIT of $4.375B - $4.425B, pro forma standalone adjusted earnings per share of $7.85 - $8.00, and second-half free cash flow of $1.2B - $1.4B.
Balance sheet and cash flow
- Cash and cash equivalents at September 26, 2026: $ 1,558.
- Long-term debt at September 26, 2026: $ 15,853.
- Total assets at September 26, 2026: $ 23,032.
- Total liabilities at September 26, 2026: $ 25,521.
- Total (deficit) equity at September 26, 2026: $ (2,489).
- 3Q 2026 net cash provided by operating activities: $ 668.
- 3Q 2026 capital expenditures: $ (168).
- 3Q 2026 free cash flow: $ 500.
- Nine Months Ended September 26, 2026 net cash provided by operating activities: $ 1,014.
- Nine Months Ended September 26, 2026 capital expenditures: $ (428).
- Nine Months Ended September 26, 2026 proceeds from issuance of long-term debt: $ 15,843.
Analysis
Honeywell Aerospace reported 3Q 2026 net sales of $ 4,644, up 2% from $ 4,533, while net income increased 13% to $ 737. Adjusted EBIT rose 1% to $1,161. The reported result included an approximately $50 million net benefit from International Emergency Economic Powers Act tariff refunds and new costs necessary as an independent public company. Backlog reached $19,324, up 12% from $17,255, and trailing twelve-month orders were up 9%, led by Defense and Space.
Demand was strongest in Commercial Original Equipment, where sales were up 7% on a reported basis and 8% organically to $0.7 billion, supported by commercial air transport build rates and selectable equipment volumes. Commercial Aftermarket sales grew 2% to $2.1 billion, but mechanical component availability constrained growth. Defense and Space sales expanded 1% to $1.8 billion as growth led by the CAES and Civitanavi acquisitions was partly offset by lower international volumes, supply constraints, and the wind-down of a non-aerospace restricted government program.
Segment profitability was uneven. Electronic Solutions sales increased 4% and segment adjusted EBIT increased 11% to $564, as tariff refunds and pricing more than offset unfavorable mix and higher costs. Engines and Power Systems sales increased 3%, but segment adjusted EBIT declined 16% to $250 because unfavorable mix and higher costs outweighed price and tariff-refund effects. Control Systems sales were flat at $1,345, while segment adjusted EBIT increased 2% to $382 as price more than offset higher costs and unfavorable mix.
Cash generation was positive in the quarter, with $ 668 of cash provided by operating activities, $ (168) of capital expenditures, and $ 500 of free cash flow. At September 26, 2026, cash and cash equivalents were $ 1,558 and long-term debt was $ 15,853. The board declared an inaugural quarterly cash dividend of $0.40 per share, payable on December 4, 2026 to shareholders of record as of November 13, 2026.
Management maintained full-year organic growth guidance of 4% - 5%, narrowed pro forma standalone adjusted EBIT guidance to $4.375B - $4.425B from $4.35B - $4.45B, and increased pro forma standalone adjusted earnings per share guidance to $7.85 - $8.00 from $7.60 - $7.90. It also raised second-half free cash flow guidance to $1.2B - $1.4B from $1.0B - $1.4B. The central operational issue remains the supply constraint from a small number of mechanical suppliers, although management cited encouraging signs from pacing suppliers and ongoing qualification of additional material sources.
Management, verbatim
Honeywell Aerospace delivered results above our expectations in its first quarter as a standalone company, increasing sales and adjusted EBIT sequentially and year over year as we accelerate investments to drive greater output and better serve our customers. Demand for our solutions remains robust with 9% orders growth over the last 12 months.
Jim Currier, Chief Executive Officer of Honeywell Aerospace
We are seeing encouraging signs from pacing suppliers as we deepen our commitment to enduring partnerships. This progress, combined with ongoing qualification of additional material sources, positions us for higher sales and output growth in 2027 and beyond.
Jim Currier, Chief Executive Officer of Honeywell Aerospace
The Board’s decision to declare a regular dividend underscores the visibility into our durable free cash flow growth in the years ahead. Paying a competitive, growing dividend is a key component of our capital allocation strategy designed to deliver substantial shareholder value while maintaining financial flexibility and a strong investment-grade credit rating.
Jim Currier, Chief Executive Officer of Honeywell Aerospace
Not in the filing
stated, not guessed- 3Q 2026 gross margin and prior-year gross margin were not reported.
- 3Q 2026 GAAP operating income was not reported.
- 3Q 2026 operating margin was not reported.
- 3Q 2026 GAAP tax rate was not reported.
- 3Q 2026 share repurchases were not reported.
- Nine Months Ended September 26, 2026 gross margin, GAAP operating income, operating margin, adjusted earnings per share, and free cash flow were not reported.
- Prior-year comparison for 3Q 2026 adjusted earnings per share was not presented because comparisons to prior-year pre-separation results are not considered meaningful.
- Full-year 2026 GAAP revenue, GAAP operating income, GAAP earnings per share, GAAP tax rate, gross margin, and operating-expense guidance were not reported.
- No full-year 2026 actual results were reported for comparison with the prior guidance ranges.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Honeywell Aerospace filed a Form 8‑K reporting its third‑quarter financials and outlook.
Ticker impact
Honeywell Aerospace reported Q3 2026 results, raised full-year adjusted EPS and free cash flow guidance, and announced a $0.40 quarterly dividend.
likely upward pressure as investors price in updated earnings outlook and dividend initiation
Guidance was updated and a new dividend was declared, both typically support share price gains in the short term.
Market effects
Aerospace and defense suppliers may see modest uplift from Honeywell's strong order growth and backlog expansion.
U.S. markets could see a small boost in aerospace-related indices.
Limited; primarily impacts U.S. aerospace sector.
Counterpoint
The raised guidance may already be priced in; supply-chain constraints could limit upside.
Key entities
- companyHoneywell Aerospace
Aerospace and defense manufacturer, recently spun off from Honeywell.
