Honeywell’s portfolio overhaul gains traction

CHARLOTTE, N.C. — Honeywell’s ongoing portfolio overhaul is beginning to show results, with strong aerospace demand and growing building automation revenue driving 2025 fourth‑quarter and full‑year performance, as the company makes progress with spin-offs and divestiture plans. 

Aerospace on track for 2026 

The company’s better-than-expected performance – fourth-quarter sales were up 6% year over year – was largely fueled by robust demand for products and services from its Aerospace business. The spin off of that business, announced in February 2025, is now expected to be completed in the third quarter of 2026, earlier than previously anticipated. 

“It was about a year ago that we announced our intention to spin off aerospace, which will result in the creation of three leading pure-play independent public companies,” Honeywell CEO Vimal Kapur told investors during a recent conference call. “We have made tremendous progress throughout the year, with the advanced materials spin complete, and we now expect to complete the aerospace spin in 2026.” 

In late January, the company announced that Honeywell Aerospace was welcoming Josh Jepsen as CFO. Bob Buddecke (Electronic Solutions), Dave Marinick (Engines & Power Systems) and Rich DeGraff (Control Systems) are set to lead the three business units under Honeywell Aerospace Technologies President and CEO Jim Currier. 

Automation in-demand and growing 

Additional growth came from recurring revenue in Honeywell’s Building Automation business and its artificial intelligence (AI)-enhanced data center solutions. CFO Mike Stepniak said the company expects full-year Building Automation sales growth above the mid-single digits in 2026, driven by expanding demand in the data center and health care markets. Kapur added that data centers are approaching more than 5% of the company’s overall revenue. 

There’s caution to be had, however, as Kapur noted during the Q&A portion of the call that excess capacity in petrochemicals and slowness in automation migrations may continue to lag on the performance of the business. 

"Our guide doesn't factor any change in that in 2026,” he said. “Now I'm not suggesting it won't change, but we are cautious on how we are guiding at this point." 

Upcoming divestitures of other businesses 

As Honeywell continues to reorganize around its automation and aerospace segments, the company also plans to pursue the sale of its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses.  

Kapur said the moves are intended to better position Honeywell’s core businesses for a strong start to 2026. 

“We remain confident in our path ahead, and we look forward to sharing more with everyone in the quarters to come,” he added. 

By the numbers 

• Fourth quarter sales of $9.8 Billion, up 6%, adjusted sales of $10.1 billion, up 10%, up 11% organic 
• Fourth quarter GAAP earnings per share (EPS) of $0.49 and adjusted EPS of $2.59 
• Fourth quarter orders up 23% organically, driving backlog to more than $37 billion 
• Expected 2026 adjusted EPS of $10.35 - $10.65, up 6% - 9%