Honeywell International Inc ( HON ). on Thursday reported third-quarter 2025 results that beat Wall Street expectations and raised its full-year earnings and sales outlook.

Details

The company posted adjusted earnings of $2.82 per share, topping analysts’ estimates of $2.57.

Revenue for the quarter rose 7% year over year (Y/Y) to $10.41 billion, beating expectations of $10.14 billion.

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Organic sales increased 6% Y/Y, aided by double-digit growth in commercial aftermarket and defense and space.

Operating income declined 6% Y/Y, and segment profit increased 5% to $2.4 billion. This was led by strength in Energy and Sustainability Solutions and Building Automation segments.

The operating margin contracted 220 basis points to 16.9% and segment margin contracted 50 basis points to 23.1%.

Operating cash flow was $3.3 billion, up 65% Y/Y, and free cash flow was $1.5 billion, down 16% Y/Y in the quarter.

Segment Performance

Segment results were mixed. Aerospace Technologies generated $4.51 billion in sales, up 12% Y/Y organically. However, segment margins declined 160 basis points due to cost inflation and recent acquisitions.

Building Automation posted $1.88 billion in sales with 7% Y/Y organic growth and an 80 basis-point margin expansion led by volume leverage and strong commercial operation.

Industrial Automation reported $2.27 billion in sales, up 1% Y/Y on an organic basis. However, segment margins contracted 150 basis points Y/Y due to cost inflation.

Energy and Sustainability Solutions recorded $1.74 billion in sales, down 2% Y/Y organically. UOP sales fell 13% Y/Y due to expected licensing delays and weak catalyst shipment volumes. However, segment margins remained flat Y/Y in the quarter.

Outlook

Honeywell ( HON ) raised its 2025 adjusted EPS guidance to $10.60 – $10.70 from $10.45 – $10.65, versus the consensus of $10.54.

However, the company lowered its full-year sales outlook to $40.7 billion-$40.9 billion, from $40.8 billion-$41.3 billion, versus a consensus of $40.84 billion.

Honeywell ( HON ) now expects operating cash flow to be between $6.4 billion-$6.8 billion (versus $6.7 billion-$7.1 billion prior), and free cash flow of $5.2 billion-$5.6 billion (versus $5.4 billion and $5.8 billion prior).

Excluding the Bombardier settlement, it forecasts 5% organic sales growth, segment margin down 40 to 30 basis points, and adjusted EPS up about 3% for the year.

Management Commentary

Vimal Kapur, chairman and chief executive officer of Honeywell ( HON ), stated, “Increased orders across our business segments pushed the company’s total backlog to another record high and reinforced the benefit of the new, innovative solutions we are delivering for customers. All of this translated to us exceeding the high end of our guidance for both organic growth and adjusted earnings per share in the quarter.”

Portfolio Restructuring

Honeywell ( HON ) disclosed an updated business segment structure in preparation for two upcoming separations.

Effective January 1, 2026, Honeywell ( HON ) will adopt a new structure for its reporting segments: Aerospace Technologies, Building Automation, Industrial Automation, and Process Automation and Technology.

Notably, the company plans to spin off its Solstice Advanced Materials business by October 30, 2025, followed by the planned separation of its Aerospace Technologies business in the second half of 2026.

Investors can gain exposure to the stock via Themes Transatlantic Defense ETF ( NATO ) and EA Series Trust Castellan Targeted Income ETF .

Price Action: HON shares were trading higher by 4.17% to $215.23 premarket at last check Thursday.

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