Honeywell Gears Up to Report Q3 Earnings: Is a Beat in Store?

Honeywell International Inc. HON is scheduled to release third-quarter 2025 results on Oct. 23, before market open.

The Zacks Consensus Estimate for HON’s third-quarter revenues is pegged at $10.09 billion, indicating growth of 3.7% from the prior-year quarter’s figure. The consensus mark for earnings is pinned at $2.56 per share, which has edged down 0.4% in the past 30 days. The figure indicates a decline of 0.8% from the year-ago quarter's figure.

The company delivered better-than-expected results in each of the trailing four quarters, the earnings surprise being 6.7% on average. In the last reported quarter, its bottom line beat the consensus estimate by 4.2%.

Let us see how things have shaped up for Honeywell this earnings season.

Factors Likely to Have Shaped HON’s Quarterly Performance

Strong momentum in Honeywell’s commercial aviation aftermarket business, driven by robust demand in the air transport market, is expected to have supplemented the top-line performance of its Aerospace Technologies segment. Strength in the defense and space business, owing to stable U.S. and international defense spending volumes and sustained demand from the current geopolitical climate, is likely to have been a tailwind as well. We expect the segment’s revenues to increase 8.4% year over year to $4.24 billion in the third quarter.

Solid demand for its products and solutions, supported by increasing building projects, particularly in North America, Middle East and India, is expected to augment the Building Automation segment’s results. Increasing order rates in data centers, airports and healthcare markets are likely to have been a tailwind as well. Our estimate for revenues from the Building Automation segment is pegged at $1.88 billion, indicating an increase of 7.5% year over year. 

The Energy and Sustainability Solutions segment is expected to have witnessed a year-over-year increase in revenues, driven by strength in the Advanced Materials business and higher refining and petrochemicals projects. We expect the segment’s revenues to increase 0.7% year over year to $1.57 billion in the third quarter.

However, Honeywell’s Industrial Automation Solutions segment is expected to have put up a weak show in the quarter due to softness in the productivity solutions and services business, owing to a decrease in license and settlement payments. Softness in the warehouse and workflow solutions and sensing and safety technologies businesses, due to a lower demand environment, is also expected to have been a spoilsport. For the third quarter, our estimate for revenues from the Industrial Automation segment is pegged at $2.32 billion, indicating a year-over-year decline of 7.2%.

Over time, HON’s performance has been negatively impacted by high costs and expenses. Higher direct and indirect material costs and investments in digital infrastructure and business integration activities are expected to have pushed up the company’s operating expenses, which are likely to have reflected in its margins. We expect HON’s cost of sales to increase 3.4% year over year to $6.18 billion in the third quarter.

Earnings Whispers

Our proven model predicts an earnings beat for HON this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. 

Earnings ESP: HON has an Earnings ESP of + 0.38% as the Most Accurate Estimate is pegged at $2.57 per share, which is higher than the Zacks Consensus Estimate of $2.56. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: HON currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Here are some other companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.

Allegion plc ALLE has an Earnings ESP of +1.24% and a Zacks Rank of 3 at present. The company is slated to release third-quarter 2025 results on Oct. 23.

Allegion’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.9%.

ITT Inc. ITT has an Earnings ESP of +0.72% and a Zacks Rank of 2 at present. The company is scheduled to release third-quarter 2025 results on Oct. 29.

ITT’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 1.5%.

Howmet Aerospace Inc. HWM has an Earnings ESP of +0.30% and a Zacks Rank of 3 at present. The company is slated to release third-quarter 2025 results on Oct. 30.

Howmet Aerospace’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.1%.

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This article originally published on Zacks Investment Research (zacks.com).

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