Honeywell International (HON) Q4 2025 earnings summary

Executive summary

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

• Major portfolio transformation advanced, including Solstice Advanced Materials spin-off, planned Aerospace separation by Q3 2026, and sales of non-core businesses.

• Quantinuum achieved $840M fundraising at a $10B valuation, launched Helios quantum computer, and partnered with NVIDIA, positioning for quantum leadership.

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

• Leadership changes and new segment reporting structure to take effect in 1Q26, aligning with separation plans.

Financial highlights

• Q4 2025 organic sales grew 11% (6% ex-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 $9.78, up 12%, and free cash flow $5.1B, up 20%.

• Segment margin for Q4 2025 was 22.8% (up 240 bps); full-year adjusted segment margin was 22.5% (up 40 bps).

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

• Q4 operating income fell 35% due to impairment and litigation charges; Flexjet litigation settlement excluded from adjusted metrics.

Outlook and guidance

• 2026 sales guidance: $38.8B–$39.8B, up 3%–6% organically, with segment margin 22.7%–23.1% (up 20–60 bps).

• Adjusted EPS guidance: $10.35–$10.65, up 6%–9%; free cash flow guidance: $5.3B–$5.6B, up 4%–10%.

• Q1 2026 organic sales growth of 3%–5% expected; segment margin 22.4%–22.6%; adjusted EPS $2.25–$2.35.

• Margin expansion expected from operational improvements, pricing, and volume leverage, with Quantinuum investments as a headwind.