Honeywell Aerospace raises 2026 earnings forecast, declares first dividend

Honeywell Aerospace Inc. (HONA) said on Oct. 28 that third-quarter sales rose 2% from a year earlier to $4.644 billion, and it raised its full-year 2026 adjusted earnings per share guidance.

Shares fell 2.7% in after-hours trading as of 7:40 p.m. ET, from a regular-session close of $177.26.

The company also declared its first quarterly cash dividend as an independent public company, 40 cents per share. The results cover the quarter ended Sept. 26, 2026, and were furnished in an 8-K filing with the Securities and Exchange Commission.

Honeywell Aerospace is an independent global aerospace and defense company headquartered in Phoenix, Arizona. It employs more than 36,000 people and supports more than 10,000 customers.

Here's how the company did:

• Sales: $4.644 billion vs. $4.533 billion a year earlier
• Adjusted EPS: $2.21 per share
• Diluted EPS: $2.29 per share vs. $2.03 a year earlier
• Net income: $737 million vs. $654 million a year earlier
• Adjusted EBIT: $1.161 billion vs. $1.151 billion a year earlier
• Free cash flow: $500 million

Backlog grew 12% from a year earlier to $19.3 billion at quarter end. Trailing twelve-month orders were up 9%, led by Defense and Space.

Adjusted EBIT rose 1%, including an approximately $50 million net benefit from International Emergency Economic Powers Act (IEEPA) tariff refunds and new costs the company incurred as an independent public company.

2026 guidance

The company raised its full-year pro forma standalone adjusted earnings per share guidance to $7.85 to $8.00, from $7.60 to $7.90. It raised second-half free cash flow guidance to $1.2 billion to $1.4 billion, from $1.0 billion to $1.4 billion.

It narrowed pro forma standalone adjusted EBIT guidance to $4.375 billion to $4.425 billion, from $4.35 billion to $4.45 billion. Year-over-year EBIT growth is now expected to be up 1% to 2%, from flat to 3%. Organic sales growth guidance of 4% to 5% was maintained.

CEO Jim Currier said, “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.”

Segment results

Commercial Original Equipment sales rose 7% to $690 million. Commercial Aftermarket sales grew 2% to $2.1 billion, and Defense and Space sales rose 1% to $1.8 billion.

Electronic Solutions sales rose 4% to $1.784 billion, or 5% organically. Segment adjusted EBIT rose 11% to $564 million from $510 million, as tariff refunds and pricing more than offset unfavorable mix and higher costs.

Engines and Power Systems sales rose 3% to $1.515 billion, led by higher Commercial Aftermarket volumes. Segment adjusted EBIT fell 16% to $250 million from $299 million, as unfavorable mix and higher costs more than offset price and the impact of tariff refunds.

Control Systems sales were flat at $1.345 billion. Segment adjusted EBIT rose 2% to $382 million from $376 million, as price more than offset higher costs and unfavorable mix.

Cash and capital returns

The board approved a quarterly cash dividend of 40 cents per share. It is payable Dec. 4, 2026, to shareholders of record at the close of business on Nov. 13, 2026.

CEO Jim Currier added, “The Board’s decision to declare a regular dividend underscores the visibility into our durable free cash flow growth in the years ahead.”

Operating cash flow was $668 million in the quarter and capital expenditures were $168 million, leaving free cash flow of $500 million. Cash and cash equivalents were $1.558 billion at Sept. 26, 2026, and long-term debt was $15.853 billion.

Tempe manufacturing expansion

In a separate press release furnished under Item 7.01, the company said it will build a 300,000 square foot manufacturing facility at its Tempe, Arizona campus. The investment is $500 million, and the facility is expected to open in late 2028.

The company said the facility will create approximately 600 jobs and add internal complex machining capability, a part of the supply base it describes as currently constrained. It will support $15 billion in Control Systems new program wins.

The company also presented an update on its supply chain transformation at a September investor conference.