Honeywell Raises 2025 Outlook After Strong Third-Quarter Results and Ongoing Portfolio Transformation
Honeywell International Inc. today announced its third-quarter results, with overall sales growing 7 % year-over-year and organic sales up 6 %. The company said its results met or exceeded its prior guidance. Operating income declined by 6 %, yet segment profit rose 5 % to US $2.4 billion, driven by strong performance in its Energy & Sustainability Solutions and Building Automation units. The operating margin contracted 220 basis points to 16.9 %, while the segment margin narrowed by 50 basis points to 23.1 %. Earnings per share (EPS) amounted to US $2.86, an increase of 32 % year-over-year, and adjusted EPS came in at US $2.82, up 9 %.
Operating cash flow surged 65 % to US $3.3 billion, although free cash flow slipped 16 % to US $1.5 billion. The company also announced that it is raising its full-year 2025 guidance for organic growth and adjusted EPS, and updated its free cash-flow target, factoring in the spin-off of its advanced materials business. That spin-off, Solstice Advanced Materials, is scheduled for October 30, 2025 and is expected to reduce full-year sales by US $0.7 billion, reduce adjusted EPS by US $0.21 and cut free cash flow by US $0.2 billion. Full-year sales are now expected in the range of US $40.7 billion to US $40.9 billion, with organic growth of approximately 6 %. Segment margin is forecast to be 22.9 % to 23.0 %, representing expansion of 30–40 basis points. Adjusted EPS is now expected to be US $10.60 to US $10.70, higher by US $0.10 at the midpoint from the prior range. Operating cash flow is projected at US $6.4 billion to US $6.8 billion, with free cash flow in the range of US $5.2 billion to US $5.6 billion.
Excluding the impact of a prior agreement with Bombardier Inc. and the Solstice spin-off, the company expects organic sales growth of about 5 %, a segment margin decline of 30–40 basis points, and adjusted EPS growth roughly 3 %. When excluding both the Bombardier agreement and the spin-off, adjusted EPS growth is expected in the range of 5 % to 6 %.
The company said its board has concluded its portfolio review and is pursuing the separation of its Automation and Aerospace businesses, so that it will become three publicly-listed industry-leading companies by the second half of 2026. CEO Vimal Kapur commented that the quarter’s strong results reflect the company’s momentum and its ability to unlock new value as it simplifies the business and advances its transformation.
