10-Q · July 23, 2026
Honeywell posted 4% Q2 sales growth to $9.719B, with Building Automation delivering 10% revenue growth and a 90-basis-point margin improvement, while backlog rose 12% to $38.008B. Profitability was mixed: gross margin…
Earnings analysis · 10-Q
HON earnings analysis
Filed October 22, 2026 · Our reading of the company's report
The latest report
Honeywell delivered a quarterly EPS beat at $2.40, but sales of $4.994 billion were slightly below the $5.010 billion consensus estimate. Growth in two segments and improved outlook metrics were offset by a 23% reported…
Read full summary
Honeywell delivered a quarterly EPS beat at $2.40, but sales of $4.994 billion were slightly below the $5.010 billion consensus estimate. Growth in two segments and improved outlook metrics were offset by a 23% reported sales decline in Industrial Automation and a 74% year-over-year decline in operating cash flow to $607 million. Management nevertheless raised full-year sales, adjusted EPS, and free cash flow guidance, supporting a neutral overall assessment.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $2.4
- Segment
- Industrial Automation: reported sales declined 23% year over year.
- Segment
- Two other segments delivered sales growth, but the filing data provided does not quantify their individual increases.
What stood out
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EPS beat despite modest revenue miss
Third-quarter sales were $4.994 billion, only modestly below the $5.010 billion consensus estimate, while diluted EPS was $2.40 versus the $2.17 estimate.
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Full-year outlook raised
Management raised full-year 2026 sales guidance to $20.0 billion-$20.1 billion from $19.8 billion-$20.0 billion and adjusted EPS guidance to $8.40-$8.45 from $8.05-$8.35.
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Cash flow and margin outlook improved
Full-year free cash flow guidance increased to approximately $2.1 billion from approximately $2.0 billion, while expected segment margin is approximately 20.5%.
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Internal controls remain effective
The filing states that disclosure controls and procedures were effective as of September 30, 2026, with no changes that materially affected internal control over financial reporting.
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Repurchase capacity preserved
No shares were repurchased during the three months ended September 30, 2026, leaving $679 million available under the repurchase authorization.
What to watch
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Industrial Automation remains a headwind
Industrial Automation reported sales declined 23%, indicating continued weakness in a key business despite growth in two other segments.
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Operating cash flow declined sharply
Operating cash flow was $607 million, down 74% from the prior-year period, creating a meaningful liquidity and execution concern even though full-year free cash flow guidance increased to approximately $2.1 billion.
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Revenue miss and project-mix pressure
Quarterly sales of $4.994 billion fell short of the $5.010 billion consensus estimate, while project mix pressured reported margins according to management's discussion.
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Portfolio actions increase execution risk
The updated risk factor highlights acquisition-integration and divestiture-execution exposure following the June 29, 2026 Aerospace Spin-Off, including potential liabilities retained or indemnified in connection with former businesses.
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Capital allocation remains discretionary
The company disclosed that $679 million remained available under its repurchase authorization, but no shares were repurchased in the quarter; future repurchases may vary with operating, financing, and investing activity.
Management's outlook
Full-year 2026 sales guidance was raised to $20.0 billion-$20.1 billion from $19.8 billion-$20.0 billion; adjusted EPS guidance was raised to $8.40-$8.45 from $8.05-$8.35; and free cash flow guidance was raised to approximately $2.1 billion from approximately $2.0 billion. Expected segment margin is approximately 20.5%.
Earlier filings 3
10-Q · July 23, 2026
Honeywell reported $9.714B of Q2 sales, up 4% year over year, with Building Automation the standout at 10% growth and a 90-basis-point margin improvement to 27.1%. However, consolidated gross margin fell 170 basis…
10-Q · April 23, 2026
Honeywell reported modest revenue growth (total net sales change +2%) in Q1 2026 driven by pricing (+4%) and FX (+2%) while volume declined (−2%). Gross margin was largely stable at 38.7% (down 10 bps vs. Q1 2025) but…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.