HON's Q4 Earnings Top Estimates, Aerospace Technologies Sales Up Y/Y

Honeywell International Inc. HON reported fourth-quarter 2025 adjusted earnings of $2.59 per share, which surpassed the Zacks Consensus Estimate of $2.53. The bottom line increased 17% year over year on an adjusted basis. On a reported basis, the company’s earnings were 49 cents per share, down 72% year over year due to a one-time impairment charge related to the classification of the Productivity Solutions and Services and Warehouse and Workflow Solutions businesses as assets held for sale.

Total revenues of $9.8 billion missed the consensus estimate of $10.07 billion. However, the top line increased 6% from the year-ago quarter, driven by strength in the Aerospace Technologies and Building Automation segments. Organic sales increased 11% year over year.

In 2025, HON reported net revenues of $37.4 billion, which increased 8% year over year. The company’s adjusted earnings were $9.78 per share, up 12% year over year.

Honeywell Q4 Performance by Business Segment

Beginning in the second quarter of 2024, the company started operating under the segments discussed below.

Aerospace Technologies’ quarterly revenues were $4.52 billion, up 13% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.75 billion. Organic sales increased 21% year over year. Strength in both commercial aftermarket and defense and space markets, driven by increased flight activity, augmented the top line. Organic sales from the commercial aftermarket surged 13%, driven by persistent strength across business jet and air transport markets, along with supply-chain improvements. Sales from the defense and space business increased 10% on robust global demand. 

Industrial Automation revenues declined 8% year over year to $2.40 billion. The Zacks Consensus Estimate for the segment’s revenues was pegged at $2.30 billion. Organic sales grew 1% year over year. The sales decline was primarily attributable to a decrease in demand for measurement and controls products. Organic sales growth was driven by strength in sensing and aftermarket services businesses.

Building Automation revenues totaled $1.97 billion, up 10% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $1.92 billion. Organic sales increased 8% year over year. The upside was driven by ongoing strength in both the building solutions and building products businesses. While sales from the building solutions business grew 9%, the same from the building products business increased 8%.

Energy and Sustainability Solutions’ revenues increased 10% to $892 million. The Zacks Consensus Estimate for the segment’s revenues was pegged at $1.22 billion. Organic sales fell 7% year over year. The results were driven by strong demand in LNG and growth in refining and petrochemicals projects. However, decreasing demand for petrochemical catalysts offset the gains.

Costs & Margins of HON

The company’s total cost of sales (cost of products and services) was about $6.29 billion, up 8.3% year over year. Selling, general and administrative expenses were $1.50 billion, up 11.6%. Interest expenses and other financial charges were $376 million, reflecting an increase of 30.1% year over year.

Operating income was $996 million, down 34.5% year over year. The operating income margin was 10.2% compared with 16.6% in the year-ago period.

HON’s Balance Sheet & Cash Flow

Exiting fourth-quarter 2025, Honeywell had cash and cash equivalents of $12.5 billion compared with $9.9 billion at the end of December 2024. Long-term debt was $27.1 billion, higher than $25.4 billion at 2024-end.

In 2025, it generated net cash of $6.4 billion from operating activities compared with $6.1 billion in the prior-year period. Capital expenditure totaled $986 million compared with $871 million in the previous year period.

Free cash flow in the year was $5.10 billion, up 20.3% from the year-ago quarter’s level.

Honeywell’s 2026 Guidance

For 2026, Honeywell expects sales to be in the range of $38.8-$39.8 billion. Organic sales are expected to increase 3-6%.

HON expects a segment margin of 22.7-23.1%. The metric indicates an increase of 20-60 basis points year over year. Adjusted earnings per share are expected to be between $10.35 and $10.65. The metric indicates an increase of 6-9% on a year-over-year basis. 

Free cash flow is expected to be in the band of $5.3-$5.6 billion.

HON’s Zacks Rank & Key Picks

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Graco Inc. GGG posted quarterly earnings of 77 cents per share in the fourth quarter of 2025, in line with the Zacks Consensus Estimate. This compares with earnings of $0.64 per share a year ago.

Graco posted revenues of $593.2 million for the quarter, surpassing the Zacks Consensus Estimate by 1.39%. This compares with year-ago revenues of $548.67 million.

Baker Hughes Company BKR reported fourth-quarter 2025 adjusted earnings of 78 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also increased from the year-ago level of 70 cents.

Total quarterly revenues of $7,386 million beat the Zacks Consensus Estimate of $7,056 million. The top line also increased from the year-ago quarter’s $7,364 million.

3M Company MMM delivered adjusted earnings of $1.83 per share in the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.82. The company reported earnings of $1.68 per share in the year-ago quarter.

MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.08 billion. On an adjusted basis, organic revenues increased 2.2% year over year.

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