Honeywell Reports Second Quarter Results; Updates 2025 Guidance

CHARLOTTE, N.C., July 24, 2025 -- Honeywell (NASDAQ: HON) today announced results for the second quarter that met or exceeded the company's guidance. The company also raised its full-year organic growth and adjusted earnings per share guidance ranges and reiterated its free cash flow guidance range.

The company reported second-quarter year-over-year sales growth of 8% and organic¹ sales growth of 5%, led by double-digit organic sales growth in defense and space and UOP. Operating income increased 7% and segment profit¹ increased 8% to $2.4 billion led by growth in Building Automation. Operating margin contracted 30 basis points to 20.4% and segment margin contracted 10 basis points to 22.9%, meeting previous guidance. Earnings per share for the second quarter was $2.45, up 4% year over year, and adjusted earnings per share¹ was $2.75, up 10% year over year. Operating cash flow was $1.3 billion, down 4% year over year, and free cash flow¹ was $1.0 billion, down 9% year over year.

"Honeywell delivered outstanding results in the second quarter with both organic growth and adjusted earnings per share exceeding guidance despite the unpredictable macroeconomic backdrop," said Vimal Kapur, chairman and chief executive officer of Honeywell. "With Building Automation leading the way, three out of four segments grew sales at better than 5% in the quarter, demonstrating the power of our Accelerator operating system to adapt quickly and drive growth even as business conditions change. During the quarter, we also saw promising results from our increased focus on new product innovation, which further supported the growth of our record backlog. In parallel, we continued to take a balanced approach to capital deployment, including selectively pursuing attractive M&A opportunities, such as the bolt-on acquisition of Johnson Matthey's Catalyst Technologies business and the strategic tuck-in of Li-ion Tamer."

Kapur added, "With the announcement of our review of strategic alternatives for our Productivity Solutions and Services and Warehouse and Workflow Solutions businesses, this month also marked the conclusion of the in-depth portfolio review that I initiated early in my tenure as CEO to simplify and optimize Honeywell's businesses. As we prepare to separate into three industry-leading public companies, we are confident that our efforts to shape our portfolio have positioned Honeywell to deliver significant value for customers, employees, and shareholders."

As a result of the company's second-quarter performance and management's outlook for the remainder of the year, Honeywell updated its full-year sales, segment margin², and adjusted earnings per share^2,3 guidance. Full-year sales are now expected to be $40.8 billion to $41.3 billion with organic¹ sales growth in the range of 4% to 5%. Segment margin² is expected to be in the range of 23.0% to 23.2%, with segment margin² expansion of 40 to 60 basis points year over year. Adjusted earnings per share^2,3 is now expected to be in the range of $10.45 to $10.65, up 20 cents at the midpoint from the prior guidance range. Operating cash flow is still expected to be in the range of $6.7 billion to $7.1 billion, with free cash flow¹ in the range of $5.4 billion to $5.8 billion. Excluding the impact of the Bombardier agreement signed in the fourth quarter of 2024, the company expects organic sales growth of 3% to 4%, segment margin down 30 to 10 basis points year over year, and adjusted earnings per share up 1% to 3% year over year. Guidance now includes the impact of the Sundyne acquisition, which closed in June, and the sale of the company's Personal Protective Equipment business, which closed in May. A summary of the company's full-year guidance changes can be found in Table 1.

Portfolio Transformation

In February, Honeywell announced that its Board of Directors concluded its comprehensive portfolio review and decided to pursue a separation of its Automation and Aerospace businesses. The planned separation, coupled with the previously announced plan to spin advanced materials (now expected in the fourth quarter of 2025), will result in three publicly-listed industry leaders and is intended to be fully completed in the second half of 2026. To oversee the transformation processes, Honeywell formed dedicated separation management offices to ensure that its business leaders remain focused on managing day-to-day operations.

During the second quarter, Honeywell continued to optimize its portfolio and judiciously deploy shareholder capital ahead of the planned separation, including repurchasing $1.7 billion of its shares. In May, the company closed the sale of its personal protective equipment business for $1.3 billion, and in July it announced a review of strategic alternatives for its productivity solutions and services and warehouse and workflow solutions businesses. In addition, Honeywell announced the acquisition of Johnson Matthey's Catalyst Technologies business in May for £1.8 billion, closed the acquisition of Sundyne in June for $2.2 billion, and completed the strategic tuck-in acquisition of Li-ion Tamer in July. With these latest transactions, Honeywell has now announced $13.5 billion of acquisitions since December 2023 and exceeded its commitment, unveiled at its 2023 Investor Day, to deploy at least $25 billion toward high-return capital expenditures, dividends, opportunistic share repurchases, and accretive acquisitions through 2025.

Second-Quarter Performance

Honeywell sales for the second quarter were up 8% year over year on a reported basis and 5% on an organic¹ basis year over year. The second-quarter financial results can be found in Tables 2 and 3.

Aerospace Technologies sales for the second quarter increased 6% organically¹ from the prior year, driven by continued strength in both defense and space and commercial aftermarket. Defense and space grew 13% year over year, aided by an elevated global demand environment. Commercial aftermarket sales increased 7%, led by growth in air transport and ongoing supply chain unlock. Backlog grew 16% from the previous year, supported by strong double-digit growth in orders. Segment margin contracted 170 basis points to 25.5% as commercial excellence and productivity actions were more than offset by cost inflation and the impact of acquisitions.

Industrial Automation sales for the second quarter were flat on an organic¹ basis. Process solutions increased 1% year over year, led by a return to growth in smart energy. Sensing and safety technologies sales increased 4% year over year, driven by a third consecutive quarter of growth in sensing on sustained demand for healthcare sensors. Sales in warehouse and workflow solutions declined 4% year over year due to timing of large project execution. Productivity solutions and services sales decreased 7% year over year, largely as a result of challenging demand in Europe. Segment margin expanded 20 basis points year over year to 19.2% as productivity actions and commercial excellence more than offset cost pressures.

Building Automation sales for the second quarter increased 8% organically year over year. Building products grew 9% with strength across fire, security, and building management systems. Building solutions improved 5% led by growth in the Middle East. Orders grew both year over year and sequentially, led by strength in products. Segment margin expanded 90 basis points from the prior year to 26.2%, driven by volume leverage and benefit from the access solutions acquisition.

Energy and Sustainability Solutions sales for the second quarter increased 6% organically year over year. UOP grew 16%, driven by strong petrochemical catalyst shipments, higher licensing sales volumes in gas processing, and strong backlog conversion in sustainability projects. Advanced materials sales increased 1% in the quarter, as strength in specialty chemicals and materials more than offset the continuation of challenging prior year comparisons in fluorine products in the first half of the year. Segment margin contracted 110 basis points to 24.1% as pressure from a customer settlement and cost inflation were partially offset by volume leverage and the margin-accretive LNG acquisition.

Conference Call Details

Honeywell will discuss its second-quarter results and full-year 2025 guidance during an investor conference call starting at 8:30 a.m. Eastern Daylight Time today. A live webcast of the investor call as well as related presentation materials will be available through the Investor Relations section of the company’s website (www.honeywell.com/investor). A replay of the webcast will be available for 30 days following the presentation.

TABLE 1: FULL-YEAR 2025 GUIDANCE²

TABLE 2: SUMMARY OF HONEYWELL FINANCIAL RESULTS

(Dollars in millions, except per share amounts)

TABLE 3: SUMMARY OF SEGMENT FINANCIAL RESULTS

(Dollars in millions)

_{¹ See additional information at the end of this release regarding non-GAAP financial measures.}

_{² Segment margin and adjusted EPS are non-GAAP financial measures. Management cannot reliably predict or estimate, without unreasonable effort, the impact and timing on future operating results arising from items excluded from segment margin or adjusted EPS. We therefore, do not present a guidance range, or a reconciliation to, the nearest GAAP financial measures of operating margin or EPS.}

_{³ Adjusted EPS and adjusted EPS V% guidance excludes items identified in the non-GAAP reconciliation of adjusted EPS at the end of this release, and any potential future one-time items that we cannot reliably predict or estimate such as pension mark-to-market.}

About Honeywell

Honeywell is an integrated operating company serving a broad range of industries and geographies around the world. Our business is aligned with three powerful megatrends - automation, the future of aviation, and energy transition - underpinned by our Honeywell Accelerator operating system and Honeywell Connected Enterprise integrated software platform. As a trusted partner, we help organizations solve the world's toughest, most complex challenges, providing actionable solutions and innovations that help make the world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.

Honeywell uses our Investor Relations website, www.honeywell.com/investor, as a means of disclosing information which may be of interest or material to our investors and for complying with disclosure obligations under Regulation FD. Accordingly, investors should monitor our Investor Relations website, in addition to following our press releases, SEC filings, public conference calls, webcasts, and social media.

We describe many of the trends and other factors that drive our business and future results in this release. Such discussions contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), including statements related to the proposed spin-off of the Company's Advanced Materials business into Solstice Advanced Materials, a standalone, publicly traded company, the proposed separation of Automation and Aerospace Technologies, and the evaluation of strategic alternatives for the Productivity Solutions and Services and Warehouse and Workflow Solutions businesses. Forward-looking statements are those that address activities, events, or developments that we or our management intend, expect, project, believe, or anticipate will or may occur in the future. They are based on management’s assumptions and assessments in light of past experience and trends, current economic and industry conditions, expected future developments, and other relevant factors, many of which are difficult to predict and outside of our control, including Honeywell's current expectations, estimates, and projections regarding the proposed spin-off of the Company's Advanced Materials business into Solstice Advanced Materials, a standalone, publicly traded company, the proposed separation of Automation and Aerospace Technologies, and the evaluation of strategic alternatives for the Productivity Solutions and Services and Warehouse and Workflow Solutions businesses. They are not guarantees of future performance, and actual results, developments, and business decisions may differ significantly from those envisaged by our forward-looking statements, including the consummation of the spin-off of the Advanced Materials business into Solstice Advanced Materials, the proposed separation of Automation and Aerospace Technologies, and the evaluation of strategic alternatives for the Productivity Solutions and Services and Warehouse and Workflow Solutions businesses, and the anticipated benefits of each. We do not undertake to update or revise any of our forward-looking statements, except as required by applicable securities law. Our forward-looking statements are also subject to material risks and uncertainties, including ongoing macroeconomic and geopolitical risks, such as changes in or application of trade and tax laws and policies, including the impacts of tariffs and other trade barriers and restrictions, lower GDP growth or recession in the U.S. or globally, supply chain disruptions, capital markets volatility, inflation, and certain regional conflicts, which can affect our performance in both the near and long term. In addition, no assurance can be given that any plan, initiative, projection, goal, commitment, expectation, or prospect set forth in this release can or will be achieved. These forward-looking statements should be considered in light of the information included in this release, our Form 10-K, and our other filings with the Securities and Exchange Commission. Any forward-looking plans described herein are not final and may be modified or abandoned at any time.

This release contains financial measures presented on a non-GAAP basis. Honeywell’s non-GAAP financial measures used in this release are as follows:

•       Segment profit, on an overall Honeywell basis;

•       Segment profit margin, on an overall Honeywell basis;

•       Organic sales growth;

•       Free cash flow; and

•       Adjusted earnings per share.

Management believes that, when considered together with reported amounts, these measures are useful to investors and management in understanding our ongoing operations and in the analysis of ongoing operating trends. These measures should be considered in addition to, and not as replacements for, the most comparable GAAP measure. Certain measures presented on a non-GAAP basis represent the impact of adjusting items net of tax. The tax-effect for adjusting items is determined individually and on a case-by-case basis. Refer to the Appendix attached to this release for reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures.

Q2 2025 Earnings Release Financial