European Investor
22 Oct 2026, 15:38
Honeywell Technologies Raises 2026 Outlook as Q3 Organic Sales and Adjusted EPS Accelerate
Honeywell Technologies (NASDAQ: HON) reported stronger-than-expected third-quarter 2026 performance, with broad-based organic growth, substantial margin expansion and a 34% increase in adjusted EPS prompting management to raise its full-year outlook.
Third-quarter sales were $5.0 billion, up 1% on a reported basis and 7% organically. Operating income increased 79% to $740 million, while operating margin expanded 640 basis points to 14.8%. Segment profit rose 23% to $1.06 billion, with segment margin improving 370 basis points to 21.3%.
Adjusted EPS increased 34% year over year to $2.27, driven by organic sales growth, higher segment profitability and lower net interest expense. Reported EPS fell 20% to $2.40, primarily because the prior-year period benefited from a one-time gain related to the Resideo termination agreement.
Growth was broad-based. Building Automation organic sales increased 8%, Process Automation and Technology rose 8%, and Industrial Automation grew 4%. Building Automation margin reached 27.0%, while Industrial Automation margin expanded 350 basis points to 18.4%. Process Automation margins declined 210 basis points due to project mix and acquisition-related dilution.
Backlog increased 7% year over year to nearly $19 billion, excluding recently divested businesses. Free cash flow rose 15% to $688 million, with free cash flow conversion of 95%.
Honeywell raised full-year 2026 sales guidance to $20.0 billion-$20.1 billion from $19.8 billion-$20.0 billion and increased its organic growth forecast to 4%-5% from 3%-4%. Adjusted EPS guidance was lifted to $8.40-$8.45 from $8.05-$8.35, while free cash flow guidance increased to approximately $2.1 billion.
Overall, the quarter showed accelerating underlying growth, strong productivity gains and significant margin expansion, with the higher full-year outlook reinforcing management’s confidence in the company’s standalone growth trajectory.
Honeywell Technologies (NASDAQ: HON) reported stronger-than-expected third-quarter 2026 performance, with broad-based organic growth, substantial margin expansion and a 34% increase in adjusted EPS prompting management to raise its full-year outlook.
Third-quarter sales were $5.0 billion, up 1% on a reported basis and 7% organically. Operating income increased 79% to $740 million, while operating margin expanded 640 basis points to 14.8%. Segment profit rose 23% to $1.06 billion, with segment margin improving 370 basis points to 21.3%.
Adjusted EPS increased 34% year over year to $2.27, driven by organic sales growth, higher segment profitability and lower net interest expense. Reported EPS fell 20% to $2.40, primarily because the prior-year period benefited from a one-time gain related to the Resideo termination agreement.
Growth was broad-based. Building Automation organic sales increased 8%, Process Automation and Technology rose 8%, and Industrial Automation grew 4%. Building Automation margin reached 27.0%, while Industrial Automation margin expanded 350 basis points to 18.4%. Process Automation margins declined 210 basis points due to project mix and acquisition-related dilution.
Backlog increased 7% year over year to nearly $19 billion, excluding recently divested businesses. Free cash flow rose 15% to $688 million, with free cash flow conversion of 95%.
Honeywell raised full-year 2026 sales guidance to $20.0 billion-$20.1 billion from $19.8 billion-$20.0 billion and increased its organic growth forecast to 4%-5% from 3%-4%. Adjusted EPS guidance was lifted to $8.40-$8.45 from $8.05-$8.35, while free cash flow guidance increased to approximately $2.1 billion.
Overall, the quarter showed accelerating underlying growth, strong productivity gains and significant margin expansion, with the higher full-year outlook reinforcing management’s confidence in the company’s standalone growth trajectory.
