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HON's revenues rose 2% to $9.14B, missing estimates, led by aerospace and building automation strength.
HON saw margin pressure, with operating margin falling to 16.1% and free cash flow dropping sharply.
Honeywell International Inc. (HON - Free Report) reported first-quarter 2026 adjusted earnings of $2.45 per share, which surpassed the Zacks Consensus Estimate of $2.31. The bottom line increased 11% year over year on an adjusted basis. On a reported basis, the company’s earnings were $1.29 per share, indicating a decrease of 35%.
Total revenues of $9.14 billion missed the consensus estimate of $9.27 billion. However, the top line increased 2% from the year-ago quarter, driven by strength in the Aerospace Technologies and Building Automation segments. Organic sales also increased 2% year over year.
Honeywell’s Q1 Performance by Business Segment
Beginning in the first quarter of 2026, the company started operating under the segments discussed below.
Aerospace Technologies’ quarterly revenues were $4.32 billion, up 4% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $4.53 billion. Organic sales increased 3% year over year. Strength in both commercial aftermarket and defense and space markets augmented the top line. Sales from the commercial aftermarket grew 3%, driven by increased demand from existing customers. Sales from the defense and space business increased 4% on robust global demand.
Industrial Automation revenues declined 11% year over year to $1.42 billion. However, organic sales grew 1% year over year. The sales decline was primarily attributable to a decrease in demand for productivity solutions and services. Organic sales growth was driven by strength in warehouse and workflow solutions, and measurement businesses.
Building Automation revenues totaled $1.88 billion, up 11% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $1.86 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 8%, the same from the building products business also increased 8%.
Process Automation and Technology revenues increased 5% to $1.51 billion. However, organic sales fell 6% year over year. The results were driven by strong demand for LNG. However, a slowdown in catalyst reloads and automation projects due to the Middle East conflict offset the gains.
Honeywell International Inc. Price, Consensus and EPS Surprise
The company’s total cost of sales (cost of products and services) was about $5.60 billion, up 2.6% year over year. Selling, general and administrative expenses were $1.31 billion, flat year over year. Interest expenses and other financial charges were $356 million, reflecting an increase of 24.9% year over year.
Operating income was $1.47 billion, down 14.4% year over year. The operating income margin was 16.1% compared with 19.3% in the year-ago period.
HON’s Balance Sheet & Cash Flow
Exiting first-quarter 2026, Honeywell had cash and cash equivalents of $12 billion compared with $12.5 billion at the end of December 2025. Long-term debt was $29 billion, higher than $27.1 billion at 2025-end.
In the first three months of 2026, it used net cash of $650 million from operating activities against $597 million cash generated in the prior-year period. Capital expenditure totaled $223 million compared with $190 million in the previous year.
Free cash flow in the first three months was $56 million, compared with $191 million reported in the year-ago quarter.
Q2 Guidance by HON
For the second quarter of 2026, Honeywell expects sales to be in the range of $9.4-$9.6 billion. Organic sales are expected to increase 2-4%.
HON expects a segment margin of 22.2-22.5%. The metric indicates a decrease of 10 basis points to an increase of 20 basis points year over year. Adjusted earnings per share are expected to be between $2.35 and $2.45. The metric indicates a decrease of 3% to an increase of 1% on a year-over-year basis.
The Adjusted effective tax rate is expected to be approximately 21%.
Honeywell’s 2026 Outlook
For 2026, Honeywell reaffirmed its outlook. The company 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.
Portfolio Reshaping and Spin-Off Update
Honeywell has entered into an agreement to divest its Warehouse and Workflow Solutions business to American Industrial Partners in an all-cash deal. The company had earlier disclosed plans to divest its Productivity Solutions and Services unit. Both divestitures are expected to be completed in the second half of 2026.
Also, HON updated the expected timeline for the separation of its aerospace business, now targeting June 29, 2026, subject to customary closing conditions.
Graco Inc. (GGG - Free Report) posted quarterly earnings of 66 cents per share in the first quarter of 2026, missing the Zacks Consensus Estimate of 75 cents per share. This compares with earnings of 70 cents per share a year ago.
Graco posted revenues of $540.1 million for the quarter, missing the Zacks Consensus Estimate by 3.5%. This compares to year-ago revenues of $528.3 million.
Danaher Corporation’s (DHR - Free Report) first-quarter 2026 adjusted earnings of $2.06 per share beat the Zacks Consensus Estimate of $1.95. The bottom line increased 9.6% year over year.
Danaher reported net sales of $5.95 billion, which missed the consensus estimate of $5.99 billion. However, the metric increased 3.5% year over year.
3M Company (MMM - Free Report) delivered adjusted earnings of $2.14 per share in the first quarter of 2026, which surpassed the Zacks Consensus Estimate of $2.02. The bottom line increased 14% year over year.
MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.02 billion. On an adjusted basis, organic revenues increased 1.2% year over year.
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HON's Q1 Earnings Top Estimates, Aerospace Technologies Sales Up Y/Y
Key Takeaways
Honeywell International Inc. (HON - Free Report) reported first-quarter 2026 adjusted earnings of $2.45 per share, which surpassed the Zacks Consensus Estimate of $2.31. The bottom line increased 11% year over year on an adjusted basis. On a reported basis, the company’s earnings were $1.29 per share, indicating a decrease of 35%.
Total revenues of $9.14 billion missed the consensus estimate of $9.27 billion. However, the top line increased 2% from the year-ago quarter, driven by strength in the Aerospace Technologies and Building Automation segments. Organic sales also increased 2% year over year.
Honeywell’s Q1 Performance by Business Segment
Beginning in the first quarter of 2026, the company started operating under the segments discussed below.
Aerospace Technologies’ quarterly revenues were $4.32 billion, up 4% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $4.53 billion. Organic sales increased 3% year over year. Strength in both commercial aftermarket and defense and space markets augmented the top line. Sales from the commercial aftermarket grew 3%, driven by increased demand from existing customers. Sales from the defense and space business increased 4% on robust global demand.
Industrial Automation revenues declined 11% year over year to $1.42 billion. However, organic sales grew 1% year over year. The sales decline was primarily attributable to a decrease in demand for productivity solutions and services. Organic sales growth was driven by strength in warehouse and workflow solutions, and measurement businesses.
Building Automation revenues totaled $1.88 billion, up 11% year over year. The Zacks Consensus Estimate for the segment’s revenues was pegged at $1.86 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 8%, the same from the building products business also increased 8%.
Process Automation and Technology revenues increased 5% to $1.51 billion. However, organic sales fell 6% year over year. The results were driven by strong demand for LNG. However, a slowdown in catalyst reloads and automation projects due to the Middle East conflict offset the gains.
Honeywell International Inc. Price, Consensus and EPS Surprise
Honeywell International Inc. price-consensus-eps-surprise-chart | Honeywell International Inc. Quote
Costs & Margins of HON
The company’s total cost of sales (cost of products and services) was about $5.60 billion, up 2.6% year over year. Selling, general and administrative expenses were $1.31 billion, flat year over year. Interest expenses and other financial charges were $356 million, reflecting an increase of 24.9% year over year.
Operating income was $1.47 billion, down 14.4% year over year. The operating income margin was 16.1% compared with 19.3% in the year-ago period.
HON’s Balance Sheet & Cash Flow
Exiting first-quarter 2026, Honeywell had cash and cash equivalents of $12 billion compared with $12.5 billion at the end of December 2025. Long-term debt was $29 billion, higher than $27.1 billion at 2025-end.
In the first three months of 2026, it used net cash of $650 million from operating activities against $597 million cash generated in the prior-year period. Capital expenditure totaled $223 million compared with $190 million in the previous year.
Free cash flow in the first three months was $56 million, compared with $191 million reported in the year-ago quarter.
Q2 Guidance by HON
For the second quarter of 2026, Honeywell expects sales to be in the range of $9.4-$9.6 billion. Organic sales are expected to increase 2-4%.
HON expects a segment margin of 22.2-22.5%. The metric indicates a decrease of 10 basis points to an increase of 20 basis points year over year. Adjusted earnings per share are expected to be between $2.35 and $2.45. The metric indicates a decrease of 3% to an increase of 1% on a year-over-year basis.
The Adjusted effective tax rate is expected to be approximately 21%.
Honeywell’s 2026 Outlook
For 2026, Honeywell reaffirmed its outlook. The company 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.
Portfolio Reshaping and Spin-Off Update
Honeywell has entered into an agreement to divest its Warehouse and Workflow Solutions business to American Industrial Partners in an all-cash deal. The company had earlier disclosed plans to divest its Productivity Solutions and Services unit. Both divestitures are expected to be completed in the second half of 2026.
Also, HON updated the expected timeline for the separation of its aerospace business, now targeting June 29, 2026, subject to customary closing conditions.
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 - Free Report) posted quarterly earnings of 66 cents per share in the first quarter of 2026, missing the Zacks Consensus Estimate of 75 cents per share. This compares with earnings of 70 cents per share a year ago.
Graco posted revenues of $540.1 million for the quarter, missing the Zacks Consensus Estimate by 3.5%. This compares to year-ago revenues of $528.3 million.
Danaher Corporation’s (DHR - Free Report) first-quarter 2026 adjusted earnings of $2.06 per share beat the Zacks Consensus Estimate of $1.95. The bottom line increased 9.6% year over year.
Danaher reported net sales of $5.95 billion, which missed the consensus estimate of $5.99 billion. However, the metric increased 3.5% year over year.
3M Company (MMM - Free Report) delivered adjusted earnings of $2.14 per share in the first quarter of 2026, which surpassed the Zacks Consensus Estimate of $2.02. The bottom line increased 14% year over year.
MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.02 billion. On an adjusted basis, organic revenues increased 1.2% year over year.