Honeywell International (HON) Q4 2025 earnings summary

Executive summary

• Q4 2025 delivered strong results, with adjusted sales and EPS surpassing expectations, orders up 23%, and backlog exceeding $37B, driven by aerospace and building automation.

• Major portfolio actions included the spin-off of Solstice Advanced Materials, planned aerospace separation by Q3 2026, and intent to sell Productivity Solutions and Warehouse and Workflow Solutions.

• Quantinuum raised $840M at a $10B valuation, launched new quantum computing products, and partnered with NVIDIA.

• Leadership teams for the aerospace spin and new board appointments were announced, with a new segment reporting structure set for 1Q26.

• 2026 guidance reflects continued organic growth, margin expansion, and robust free cash flow, supported by operational improvements and a strong backlog.

Financial highlights

• Q4 2025 organic sales grew 11% (6% excluding Bombardier), adjusted EPS up 17% to $2.59, and free cash flow up 48% to $2.5B.

• Full-year 2025 adjusted sales reached $37.8B, up 9–10% organically, with adjusted EPS at $9.78, up 12%, and free cash flow at $5.1B, up 20%.

• Q4 adjusted segment margin expanded to 22.8%; full-year segment margin was 22.5%, up 40 bps.

• Aerospace led growth with 12% organic sales increase for the year; building automation up 8% organically.

• Deployed $10B in capital in 2025: $3.8B share repurchases, $2.2B acquisitions, $1B capex, $3B dividends, $3.8B debt repaid.

Outlook and guidance

• 2026 sales guidance: $38.8B–$39.8B, up 3%–6% organically, led by aerospace and building automation.

• Segment margin expected to rise 20–60 bps to 22.7%–23.1%; adjusted EPS $10.35–$10.65, up 6%–9%.

• Free cash flow guidance: $5.3B–$5.6B, up 4%–10%, with 14% margin and 83% conversion at high end.

• Q1 2026 organic sales growth expected at 3%–5%; segment margin 22.4%–22.6%; adjusted EPS growth 2%–6%.