This article is based on an official press release from Honeywell.

Honeywell Reports Strong Q4 2025 Results, Accelerates Aerospace Spin-Off Timeline

Honeywell (NASDAQ: HON) has announced a robust finish to its fiscal year 2025, reporting fourth-quarter results that surpassed analyst expectations for both sales and earnings. According to the company’s official press release, the industrial giant achieved 11% organic sales growth in the quarter, largely fueled by a surging Commercial-Aircraft sector and steady demand in building automation.

Alongside the financial results, Honeywell provided significant strategic updates, most notably accelerating the timeline for the spin-off of its Aerospace business. Originally slated for a later date, the separation is now expected to be completed in the third quarter of 2026. The company also issued a confident financial outlook for 2026, projecting continued margin expansion and sales growth.

Financial Performance: Q4 2025

Honeywell’s fourth-quarter performance highlighted a sharp divergence between its adjusted operational health and its GAAP reported figures, primarily due to significant one-time charges.

Earnings and Revenue

The company reported adjusted earnings per share (EPS) of $2.59, a 17% increase year-over-year, beating analyst estimates of $2.54. Adjusted sales reached $10.1 billion, exceeding the projected $10.02 billion.

However, GAAP earnings per share fell 72% year-over-year to $0.49. Honeywell attributed this drop to non-cash impairment charges associated with planned divestitures and a litigation settlement. Despite these charges, the company’s operational metrics remained strong.

“Organic orders grew 23%, signaling strong future demand, while the backlog reached a record high of over $37 billion.”

Cash Flow and Capital

For the full year, Honeywell generated $6.1 billion in operating cash flow, a 19% increase. Free cash flow also saw a healthy boost, rising 20% to $5.1 billion.

Segment Breakdown

Performance across Honeywell’s portfolio was mixed, with the Aerospace division acting as the primary engine of growth.

• Aerospace Technologies: This segment was the top performer, posting 21% organic sales growth. The surge was driven by robust commercial aftermarket demand and increased defense spending. Even excluding the impact of the Bombardier agreement, the segment grew by 11%.
• Building Automation: Sales in this segment grew 8% organically, supported by the market’s push for energy-efficient building solutions and management systems.
• Industrial Automation: This sector remained relatively flat (+1%) as it faced softer demand in warehouse and workflow solutions.
• Energy & Sustainability (ESS): Sales declined by 7% due to weakness in petrochemical catalysts, although order growth in the segment suggests a potential rebound.

Strategic Realignment and 2026 Outlook

Honeywell is undertaking a significant portfolio transformation to simplify its structure and focus on automation and energy transition megatrends.

Accelerated Spin-Off and Divestitures

The company confirmed that the spin-off of its Aerospace business is now targeted for Q3 2026. Additionally, Honeywell plans to divest its Productivity Solutions & Services (PSS) and Warehouse & Workflow Solutions (WWS) businesses in the first half of 2026. The reclassification of these businesses as “held for sale” triggered the impairment charges reflected in the Q4 GAAP results.

Litigation Settlement

The financial results included a one-time charge related to a settlement with Flexjet. This involves a cash payment of approximately $177 million, scheduled for the first quarter of 2026. Honeywell noted that this payment is excluded from its Free Cash Flow guidance to provide a clearer view of operational cash generation.

2026 Guidance

Looking ahead, Honeywell issued optimistic guidance for the full year 2026:

• Total Sales: $38.8 billion – $39.8 billion.
• Organic Sales Growth: 3% – 6%.
• Adjusted EPS: $10.35 – $10.65 (representing 6% – 9% growth).
• Free Cash Flow: $5.3 billion – $5.6 billion.

AirPro News Analysis

The decision to accelerate the Aerospace spin-off to Q3 2026 signals Honeywell’s confidence in the standalone viability of the unit. By separating the high-growth Aerospace division from the more cyclical industrial and building automation segments, Honeywell aims to unlock shareholder value and allow each entity to pursue distinct capital allocation strategies. The record $37 billion backlog provides a substantial safety net, ensuring that the Aerospace business will launch as an independent entity with a guaranteed revenue pipeline, insulating it from immediate short-term economic volatility.

Sources: Honeywell Q4 2025 Earnings Press Release