Key Highlights

  • Adjusted EPS of USD 2.21 exceeded the USD 1.87 consensus estimate, while GAAP diluted EPS was USD 2.29.
  • Net sales of USD 4.64 billion rose 2.4% year over year and topped the USD 4.57 billion consensus estimate.
  • Backlog grew 12% from a year earlier to more than USD 19 billion, with quarterly book-to-bill at 1.3.
  • Management raised 2026 pro forma adjusted EPS guidance to USD 7.85 to USD 8.00 and declared a USD 0.40 dividend.

Honeywell Aerospace Inc. (NASDAQ:HONA) reported net sales of USD 4.64 billion for the third quarter of 2026, up from USD 4.53 billion a year earlier and above a consensus estimate of USD 4.57 billion. Adjusted earnings per share were USD 2.21, ahead of a consensus estimate of USD 1.87. GAAP diluted EPS was USD 2.29 versus USD 2.03, and net income attributable to the company rose to USD 726 million from USD 644 million.

It was the first quarter since the June 29, 2026 spin-off from Honeywell International, when 316.9 million shares were distributed to shareholders. The CEO, Jim Currier, said results landed ahead of the expectations shared in August, with sales up 3% sequentially as mechanical output improved. The adjusted EPS figure, which comes from the earnings call, is used for the estimate comparison, while the GAAP figure comes from the 10-Q.

End Markets, Margins and Balance Sheet

Commercial original equipment sales rose to USD 690 million from USD 642 million, and commercial aftermarket sales edged up to USD 2,126 million from USD 2,084 million. Defense and Space reached USD 1,828 million against USD 1,807 million. Management cited organic growth of 8% in original equipment, 2% in aftermarket and 1% in defense, with domestic defense prioritized over international sales because of supply limits.

Adjusted EBIT was USD 1.2 billion, up 4% against pro forma standalone adjusted EBIT a year ago, and included about USD 50 million of net tariff refunds that added more than 100 basis points to margin. Free cash flow was USD 0.5 billion. Net interest expense swung to USD 187 million from income of USD 5 million after the company issued USD 16.0 billion of senior notes in March 2026. Cash stood at USD 1,558 million and long-term debt at USD 15,853 million.

Guidance and Supply Chain Risks

The company kept its 2026 organic growth guidance at 4% to 5%, which implies fourth-quarter organic sales modestly below that range. Pro forma standalone adjusted EBIT guidance was narrowed around a USD 4.4 billion midpoint. Adjusted EPS guidance was raised to USD 7.85 to USD 8.00 on lower public-company costs, and second-half free cash flow guidance was raised to USD 1.2 billion to USD 1.4 billion. Capital spending is projected near USD 650 million.

Supply is the central risk. Management said about 70 critical suppliers have not consistently met needs, with roughly 10 most responsible for pacing output, and that the 10-Q lists labor, capacity and sub-tier availability constraints. The fourth quarter carries no tariff refund benefit, which management described as a margin headwind of more than 100 basis points versus the third quarter. Output growth is projected to ramp through 2027 as supply actions take hold.

Key Readings Ahead

Four data points frame the next report. The first is the backlog of more than USD 19 billion against quarterly sales of USD 4.64 billion, with trailing 12-month orders up 9% and defense orders up 18%. The second is supplier output, tracked across complex machining, castings, forgings and bearings. The third is fourth-quarter margin, which management compared with the first half of the year now that the tariff refund drops out. The fourth is the first dividend of USD 0.40 per share, payable December 4, 2026 to holders of record on November 13, alongside the USD 500 million Tempe expansion scheduled to open in late 2028.