Honeywell Aerospace (HONA.V) Q2 2026 earnings summary

Executive summary

• Completed spin-off from Honeywell International on June 29, 2026, becoming an independent public company listed on Nasdaq under the symbol HONA.

• Achieved Q2 2026 sales of $4.5–$4.52 billion, up 5% year-over-year, with backlog rising 9% to $18.2 billion, driven by strong order growth in defense and aftermarket.

• Net income for Q2 2026 was $246–$256 million, down sharply from the prior year due to significant spin-off transaction costs and inventory charges.

• Secured $15 billion in new business wins year-to-date, including record contracts with IndiGo and Aeromexico.

• Strategic focus on supply chain transformation and operational investments to unlock output growth and meet long-term targets.

Financial highlights

• Q2 2026 organic/net sales rose 5% year-over-year to $4.5–$4.52 billion; backlog at quarter-end was $18.2 billion (+9% y/y).

• Adjusted EBIT was $995 million–$1 billion, down 2–7% year-over-year, impacted by $50 million inventory obsolescence charges.

• Adjusted EPS was $1.78–$1.87, down from the prior year due to higher taxes, lower EBIT, and transaction costs.

• Gross margin for Q2 2026 was 35%, down from 36% in Q2 2025, reflecting higher material costs and inventory charges.

• Free cash flow for the second half of 2026 is guided at $1.0–$1.5 billion.

Outlook and guidance

• 2026 organic sales growth guidance revised to 4–5%, down from previous 7–9%.

• Pro forma standalone adjusted EBIT guidance set at $4.35–$4.45 billion; adjusted EPS guidance at $7.60–$7.90.

• Commercial OE and aftermarket projected to grow mid-single digits; defense and space sales expected to rise low- to mid-single digits.

• Second half free cash flow expected at $1–$1.5 billion; capex guidance at $650 million for 2026.

• Management expects continued transaction costs through at least fiscal 2027 as standalone operations are established.