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Honeywell Reports Fourth Quarter 2025 Results

Honeywell International Inc. has just announced its fourth quarter and full year results for 2025, marking a successful close to the year with earnings that surpass the high end of its guidance. The tech and manufacturing giant reported fourth quarter sales of $9.8 billion, reflecting a 6% growth compared to the previous year. Adjusted sales climbed to $10.1 billion, showcasing a significant 10% increase from Q4 2024, primarily fueled by robust demand in the Aerospace and Building Automation segments.

Fourth Quarter Highlights

In the fourth quarter, Honeywell's adjusted earnings per share (EPS) reached $2.59, indicating a 17% rise year-over-year, although GAAP EPS fell to $0.49, largely due to one-time charges related to litigation and asset impairments. Operating cash flow for the quarter was reported at $1.2 billion, on a downward trend, while free cash flow surged by 48% to $2.5 billion.

As for orders, Honeywell witnessed a 23% organic growth, pushing its backlog to over $37 billion. This momentum was driven largely by exceptional growth in Aerospace Technologies and Energy and Sustainability Solutions, particularly post the LNG acquisition completed last year. In the Aerospace segment alone, sales surged 21% organically, bolstered by high demand across both commercial and defense sectors. The commercial aftermarket sales noted a 13% increase, corroborating the rising interest in business jets and other air transport markets.

Year-End Performance

For the entire year of 2025, Honeywell recorded a sales increase of 8%, with adjusted sales climbing 9%. Notably, organic sales grew by 7%, driven by the strength in core segments, despite a 6% drop in operating income and a contraction in operating margin. Adjusted segment profit rose 11%, highlighting the company's resilience and ability to enhance profitability through operational efficiencies and strategic growth initiatives.

Looking Forward: 2026 Outlook

Looking ahead, Honeywell has set an optimistic outlook for 2026, forecasting adjusted EPS to be between $10.35 and $10.65, reflecting a growth of 6% to 9%. This guidance is reinforced by expectations of sales ranging from $38.8 billion to $39.8 billion with organic growth between 3% to 6%. Segment margins are projected to expand by 20 to 60 basis points, indicating the company’s commitment to enhancing profitability moving forward.

Furthermore, Honeywell is expected to finalize its spin-off of the Aerospace business as an independent entity by the third quarter of 2026. This anticipated separation is part of a broader strategy to streamline operations and focus on core areas, allowing Honeywell to leverage synergies and ensure long-term profitable growth.

Operational Developments

In a recent strategic move, the company completed the spin-off of its Solstice Advanced Materials business, now trading on the Nasdaq under the ticker 'SOLS'. The leadership for the forthcoming Honeywell Aerospace business has already been outlined, with key appointments aimed at fostering a robust operational structure to maximize cross-segment synergies.

In terms of litigation, Honeywell reached a comprehensive settlement with Flexjet regarding pending claims, which will bolster their ongoing business relationship. This resolution also includes extending engine maintenance agreements through 2035.

Managerial comments from Vimal Kapur, chairman and CEO, emphasized that the strong results reflect Honeywell's agility in the face of market demands and its readiness to tackle future challenges with a solid strategy in place.

Overall, 2025 has positioned Honeywell well as it transitions into 2026, with an emphasis on innovation, efficiency, and targeting high-growth sectors that align with the company’s long-term vision for sustainability and technological advancement.