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HON Q3 Earnings Beat on Automation Strength, Outlook Raised
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Key Takeaways
HON posted Q3 adjusted EPS of $2.27, up 34% year over year, beating estimates of $2.17.
Organic sales grew 7%, with Building Automation up 8% and Process Automation and Technology rising 8%.
HON raised 2026 adjusted EPS guidance to $8.40-$8.45 and free cash flow expectations to $2.1 billion.
Honeywell Technologies (HON - Free Report) reported third-quarter 2026 adjusted earnings of $2.27 per share, which surpassed the Zacks Consensus Estimate of $2.17. The bottom line increased 34% year over year on an adjusted basis. On a reported basis, the company’s earnings were $2.40 per share compared with $2.99 in the year-ago quarter, reflecting the impact of a one-time gain related to the Resideo termination agreement in the prior-year period.
Total revenues of $4.99 billion missed the Zacks Consensus Estimate of $5.01 billion by 0.4%. The top line increased 1% from the year-ago quarter, driven by strength across all three business segments. Organic sales increased 7% year over year. Short-cycle orders increased 8%, while backlog rose 7% to approximately $19 billion, excluding the Warehouse and Workflow Solutions and Productivity Solutions and Services businesses divested during the quarter.
HON’s Q3 Performance by Business Segment
Following the separation of Honeywell Aerospace on June 29, 2026, the company operates as a pure-play automation business under the segments discussed below.
Industrial Automation segment’s revenues declined 23% year over year to $1.12 billion. However, organic sales grew 4% year over year. Organic sales growth was driven by strength in industrial measurement and utilities businesses. While organic sales from the solutions business increased 16%, the same from the products business remained flat, as double-digit growth in sensing was offset by industry-wide meter deployment deferrals in utilities.
Building Automation segment’s revenues totaled $2.02 billion, up 8% year over year. Organic sales increased 8% year over year. The upside was driven by continued strength in both the building products and building solutions businesses. While organic sales from the building products business grew 11%, driven by strength in fire and security, the same from the building solutions business increased 4%, supported by services.
Process Automation and Technology segment’s revenues increased 16% to $1.86 billion. Organic sales grew 8% year over year. The results were driven by continued strength in LNG and petrochemical projects, along with higher aftermarket refining demand. While organic sales from the projects business increased 14%, driven by strong backlog conversion, the same from the aftermarket business grew 4%, supported by refining demand.
Honeywell Technologies Price, Consensus and EPS Surprise
The company’s total cost of sales, comprising the cost of products and services sold, was about $2.98 billion, down 5.7% year over year. Selling, general and administrative expenses were $1.04 billion, down 4.9% year over year. Interest expenses and other financial charges were $143 million, reflecting a decline of 45.6% year over year.
Operating income was $740 million, up 79.2% year over year. The operating income margin was 14.8% compared with 8.4% in the year-ago period.
Segment profit was $1.06 billion, up 22.6% year over year. The segment profit margin was 21.3% compared with 17.6% in the year-ago period, reflecting an expansion of 370 basis points.
HON’s Balance Sheet & Cash Flow
HON had cash and cash equivalents of $5.69 billion at the end of September 2026 compared with $12.27 billion at the end of December 2025. Long-term debt was $10.39 billion, lower than $27.14 billion at 2025-end.
Honeywell Technologies generated $932 million in cash from continuing operating activities in the first nine months of 2026 compared with $2.61 billion in the prior-year period. Capital expenditures totaled $369 million compared with $375 million in the prior-year period.
Q4 Guidance by HON
For the fourth quarter of 2026, Honeywell Technologies expects sales to be in the range of $5-$5.1 billion. Organic sales are expected to increase 5-6%.
HON expects a segment margin of approximately 22%. The metric indicates an increase of approximately 400 basis points year over year. Adjusted earnings per share are expected to be between $2.42 and $2.47. The metric indicates an increase of 32-35% on a year-over-year basis.
The adjusted effective tax rate is expected to be approximately 16%.
HON’s 2026 Outlook
For 2026, Honeywell Technologies raised its organic sales growth, adjusted earnings and free cash flow outlook. The company expects sales to be in the range of $20-$20.1 billion compared with the previous projection of $19.8-$20 billion. The higher sales forecast reflects continued strength across all three business segments, supported by strong demand in building products, industrial measurement and process automation projects.
Organic sales are expected to increase 4-5%, up from the prior projection of 3-4%. HON expects a segment margin of approximately 20.5%, at the higher end of the previous projection of 20.1-20.5%. The metric indicates an increase of approximately 290 basis points year over year.
Adjusted earnings per share are expected to be between $8.40 and $8.45, up from the previous projection of $8.05-$8.35. The metric indicates an increase of 30-31% on a year-over-year basis.
Free cash flow is expected to be approximately $2.1 billion, up from the previous projection of $2 billion. Operating cash flow is expected to be approximately $2.1 billion.
HON’s Zacks Rank
The company currently carries a Zacks Rank #4 (Sell).
TTM Technologies, Inc. (TTMI - Free Report) came out with quarterly earnings of $1.46 per share in the third quarter of 2026, beating the Zacks Consensus Estimate of $1.25 per share. This compares with earnings of 67 cents per share a year ago.
TTMI posted revenues of $1.2 billion for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 6.6%. This compares with year-ago revenues of $752.74 million.
Badger Meter, Inc. (BMI - Free Report) came out with quarterly earnings of $1.24 per share in the third quarter of 2026, beating the Zacks Consensus Estimate of $1.21 per share. This compares with earnings of $1.19 per share a year ago.
Badger Meter posted revenues of $235.94 million for the quarter ended September 2026, missing the Zacks Consensus Estimate by 1.95%. This compares with year-ago revenues of $235.65 million.
International Business Machines Corporation (IBM - Free Report) reported strong third-quarter 2026 results, with adjusted earnings rising 11% year over year to $2.95 per share. The figure beat the Zacks Consensus Estimate of $2.88 by 2.4%.
Revenues increased 4.7% to $17.10 billion, surpassing the consensus mark of $16.87 billion by 1.4%.
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HON Q3 Earnings Beat on Automation Strength, Outlook Raised
Key Takeaways
Honeywell Technologies (HON - Free Report) reported third-quarter 2026 adjusted earnings of $2.27 per share, which surpassed the Zacks Consensus Estimate of $2.17. The bottom line increased 34% year over year on an adjusted basis. On a reported basis, the company’s earnings were $2.40 per share compared with $2.99 in the year-ago quarter, reflecting the impact of a one-time gain related to the Resideo termination agreement in the prior-year period.
Total revenues of $4.99 billion missed the Zacks Consensus Estimate of $5.01 billion by 0.4%. The top line increased 1% from the year-ago quarter, driven by strength across all three business segments. Organic sales increased 7% year over year. Short-cycle orders increased 8%, while backlog rose 7% to approximately $19 billion, excluding the Warehouse and Workflow Solutions and Productivity Solutions and Services businesses divested during the quarter.
HON’s Q3 Performance by Business Segment
Following the separation of Honeywell Aerospace on June 29, 2026, the company operates as a pure-play automation business under the segments discussed below.
Industrial Automation segment’s revenues declined 23% year over year to $1.12 billion. However, organic sales grew 4% year over year. Organic sales growth was driven by strength in industrial measurement and utilities businesses. While organic sales from the solutions business increased 16%, the same from the products business remained flat, as double-digit growth in sensing was offset by industry-wide meter deployment deferrals in utilities.
Building Automation segment’s revenues totaled $2.02 billion, up 8% year over year. Organic sales increased 8% year over year. The upside was driven by continued strength in both the building products and building solutions businesses. While organic sales from the building products business grew 11%, driven by strength in fire and security, the same from the building solutions business increased 4%, supported by services.
Process Automation and Technology segment’s revenues increased 16% to $1.86 billion. Organic sales grew 8% year over year. The results were driven by continued strength in LNG and petrochemical projects, along with higher aftermarket refining demand. While organic sales from the projects business increased 14%, driven by strong backlog conversion, the same from the aftermarket business grew 4%, supported by refining demand.
Honeywell Technologies Price, Consensus and EPS Surprise
Honeywell Technologies price-consensus-eps-surprise-chart | Honeywell Technologies Quote
Costs & Margins of HON
The company’s total cost of sales, comprising the cost of products and services sold, was about $2.98 billion, down 5.7% year over year. Selling, general and administrative expenses were $1.04 billion, down 4.9% year over year. Interest expenses and other financial charges were $143 million, reflecting a decline of 45.6% year over year.
Operating income was $740 million, up 79.2% year over year. The operating income margin was 14.8% compared with 8.4% in the year-ago period.
Segment profit was $1.06 billion, up 22.6% year over year. The segment profit margin was 21.3% compared with 17.6% in the year-ago period, reflecting an expansion of 370 basis points.
HON’s Balance Sheet & Cash Flow
HON had cash and cash equivalents of $5.69 billion at the end of September 2026 compared with $12.27 billion at the end of December 2025. Long-term debt was $10.39 billion, lower than $27.14 billion at 2025-end.
Honeywell Technologies generated $932 million in cash from continuing operating activities in the first nine months of 2026 compared with $2.61 billion in the prior-year period. Capital expenditures totaled $369 million compared with $375 million in the prior-year period.
Q4 Guidance by HON
For the fourth quarter of 2026, Honeywell Technologies expects sales to be in the range of $5-$5.1 billion. Organic sales are expected to increase 5-6%.
HON expects a segment margin of approximately 22%. The metric indicates an increase of approximately 400 basis points year over year. Adjusted earnings per share are expected to be between $2.42 and $2.47. The metric indicates an increase of 32-35% on a year-over-year basis.
The adjusted effective tax rate is expected to be approximately 16%.
HON’s 2026 Outlook
For 2026, Honeywell Technologies raised its organic sales growth, adjusted earnings and free cash flow outlook. The company expects sales to be in the range of $20-$20.1 billion compared with the previous projection of $19.8-$20 billion. The higher sales forecast reflects continued strength across all three business segments, supported by strong demand in building products, industrial measurement and process automation projects.
Organic sales are expected to increase 4-5%, up from the prior projection of 3-4%. HON expects a segment margin of approximately 20.5%, at the higher end of the previous projection of 20.1-20.5%. The metric indicates an increase of approximately 290 basis points year over year.
Adjusted earnings per share are expected to be between $8.40 and $8.45, up from the previous projection of $8.05-$8.35. The metric indicates an increase of 30-31% on a year-over-year basis.
Free cash flow is expected to be approximately $2.1 billion, up from the previous projection of $2 billion. Operating cash flow is expected to be approximately $2.1 billion.
HON’s Zacks Rank
The company currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
TTM Technologies, Inc. (TTMI - Free Report) came out with quarterly earnings of $1.46 per share in the third quarter of 2026, beating the Zacks Consensus Estimate of $1.25 per share. This compares with earnings of 67 cents per share a year ago.
TTMI posted revenues of $1.2 billion for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 6.6%. This compares with year-ago revenues of $752.74 million.
Badger Meter, Inc. (BMI - Free Report) came out with quarterly earnings of $1.24 per share in the third quarter of 2026, beating the Zacks Consensus Estimate of $1.21 per share. This compares with earnings of $1.19 per share a year ago.
Badger Meter posted revenues of $235.94 million for the quarter ended September 2026, missing the Zacks Consensus Estimate by 1.95%. This compares with year-ago revenues of $235.65 million.
International Business Machines Corporation (IBM - Free Report) reported strong third-quarter 2026 results, with adjusted earnings rising 11% year over year to $2.95 per share. The figure beat the Zacks Consensus Estimate of $2.88 by 2.4%.
Revenues increased 4.7% to $17.10 billion, surpassing the consensus mark of $16.87 billion by 1.4%.