Jan 29 - Honeywell said Thursday that both revenue and adjusted profit rose in the fourth quarter, led by continued strength in its aerospace business and high-margin aftermarket services.
The company reported adjusted earnings of $2.59 per share for the quarter, up from $2.22 per share a year earlier. Total revenue for the period increased 6.4% to $9.76 billion.
Honeywell attributed part of the aerospace unit's performance to airlines flying aircraft for longer periods as delivery schedules for new jets have been pushed back. That extended utilization has driven demand for parts and maintenance, elevating the role of the aftermarket services business within aerospace and supporting profitability.
Sales in the aerospace unit rose 13.4% in the quarter to $4.52 billion. Despite encountering headwinds from elevated costs, global trade tensions and tariffs, the business has maintained stable pricing across its products and services, the company said.
At the same time, softer demand for Honeywell's automation equipment constrained the pace of earnings growth for the quarter. The company noted that weaker automation orders limited how much the stronger aerospace results could lift overall profit.
The fourth-quarter results cap a year in which the industrial conglomerate announced plans to break itself into three independent companies focused on automation, aerospace and advanced materials. Honeywell said on Thursday that it expects the planned separation of its automation and aerospace businesses to be completed in the third quarter.
Looking ahead, Honeywell issued guidance for fiscal 2026 adjusted earnings per share in a range of $10.35 to $10.65. The company noted that analysts, on average, expect $10.38 per share, based on data compiled by LSEG.
Summary
Honeywell's fourth-quarter results show growth in revenue and adjusted profit, largely driven by a 13.4% increase in aerospace sales to $4.52 billion and strengthened aftermarket service demand as airlines extend aircraft use. Softer automation equipment demand constrained broader earnings growth. Management reaffirmed progress on a planned corporate separation and set a 2026 adjusted EPS outlook of $10.35 to $10.65.
Key points
- Aerospace sales rose 13.4% to $4.52 billion, supporting overall revenue growth.
- Company-wide revenue increased 6.4% to $9.76 billion, with adjusted EPS of $2.59 in the quarter versus $2.22 a year earlier.
- Planned breakup into three independent companies remains on track, with the automation and aerospace separation expected in the third quarter; fiscal 2026 adjusted EPS guidance is $10.35 to $10.65.
Risks and uncertainties
- Ongoing pressure from high costs, trade tensions and tariffs affecting the aerospace unit could weigh on margins and operating performance - this primarily impacts aerospace and industrial suppliers.
- Softer demand for automation equipment has already limited earnings growth and represents a headwind for the automation-focused business and industrial markets.
Note: The article presents company guidance and analyst consensus figures reported by Honeywell and compiled by LSEG.