Honeywell lifts 2026 outlook after adjusted EPS jumps 34% in first quarter as a standalone automation company

Honeywell raised its full-year outlook Thursday after its first quarter as a standalone automation company produced a 34% jump in adjusted earnings per share, well ahead of the pace of its sales growth.

Honeywell Technologies now expects 2026 adjusted EPS of $8.40 to $8.45, up from a prior range of $8.05 to $8.35, according to the earnings release it filed with an 8-K before the market opened. It also lifted its organic sales growth outlook to 4% to 5% from 3% to 4% and expects free cash flow of about $2.1 billion, up from about $2.0 billion.

Third-quarter sales came to $4.99 billion, up 1% as reported and 7% on an organic basis, with all three segments growing. Adjusted EPS rose to $2.27 from $1.70. Reported EPS from continuing operations fell 20% to $2.40, which the company attributed mainly to a one-time gain from the Resideo termination agreement in the year-ago quarter.

"Honeywell Technologies delivered strong results across the business in our first quarter as a standalone company," Chairman and CEO Vimal Kapur said in the release, adding that 7% organic growth was above the three-year target set at its June investor day.

Margins do the work

Operating income rose 79% to $740 million, and the operating margin widened 640 basis points to 14.8%. Segment margin expanded 370 basis points to 21.3%, which the company credited to productivity, including the elimination of stranded costs from earlier spin-offs and divestitures, and pricing that more than offset inflation.

Building Automation sales grew 8% organically, led by 11% growth in building products. Process Automation and Technology also grew 8% organically on LNG and petrochemical projects, though its margin fell 210 basis points on project mix and dilution from the Johnson Matthey Catalyst Technologies acquisition. Industrial Automation grew 4% organically, with margin up 350 basis points to 18.4%.

Backlog rose 7% to nearly $19 billion, excluding businesses divested during the quarter. Free cash flow was $688 million, up 15%.

By the numbers

• Sales: $4.99 billion, up 7% organically
• Adjusted EPS: $2.27, up 34%
• Reported EPS: $2.40, down 20%
• Segment margin: 21.3%, up 370 basis points
• 2026 adjusted EPS outlook: $8.40 to $8.45
• 2026 sales outlook: $20.0 billion to $20.1 billion

Sources

1. Honeywell International Inc., Form 8-K (Item 2.02) with Exhibit 99 earnings release dated Oct. 22, 2026, accession 0000773840-26-000141

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