Honeywell 3Q results exceed high end of previous guidance

CHARLOTTE, N.C. — Honeywell (NASDAQ: HON) announced its 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 organic sales growth of 6%, led by double-digit organic sales growth in commercial aftermarket and defense and space. Operating income decreased 6% and segment profit 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 margin 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 share was $2.82, up 9% year over year. Operating cash flow was $3.3 billion, up 65% year over year, and free cash flow 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."

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 margin, adjusted earnings per share, and free cash flow 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 share2,3 by $0.21, and free cash flow by $0.2 billion.

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."

Full-year sales are now expected to be $40.7 billion to $40.9 billion with organic sales growth of approximately 6%. You can find the list of financial results online at investor.honeywell.com.