Honeywell's Q3 Earnings Top Estimates on Strong Aerospace Momentum

Core Insights - Honeywell International Inc. reported third-quarter 2025 adjusted earnings of $2.82 per share, exceeding the Zacks Consensus Estimate of $2.56, with a year-over-year increase of 9% on an adjusted basis and a reported earnings of $2.86 per share, up 32% year over year [1][10] Financial Performance - Total revenues reached $10.41 billion, surpassing the consensus estimate of $10.16 billion, marking a 7% increase from the previous year, driven by strong performance in Aerospace Technologies and Building Automation segments, with organic sales up 6% year over year [2][10] - Aerospace Technologies generated quarterly revenues of $4.51 billion, a 15% increase year over year, with organic sales rising 12% due to increased flight activity in commercial aftermarket and defense markets [4] - Industrial Automation revenues declined 9% year over year to $2.27 billion, with organic sales growing 1% year over year, primarily due to the divestiture of the personal protective equipment business [5] - Building Automation revenues totaled $1.88 billion, up 8% year over year, with organic sales increasing 7% driven by strength in building solutions and products [6] - Energy and Sustainability Solutions revenues increased 11% to $1.74 billion, although organic sales fell 2% year over year due to weaknesses in the UOP business [7] Costs and Margins - Total cost of sales was approximately $6.86 billion, up 14.7% year over year, while selling, general, and administrative expenses decreased by 7.3% to $1.30 billion [8] - Operating income was $1.75 billion, down 6% year over year, with an operating income margin of 16.9%, compared to 19.1% in the previous year [8] Balance Sheet and Cash Flow - As of the end of the third quarter 2025, Honeywell had cash and cash equivalents of $12.9 billion, up from $10.6 billion at the end of December 2024, while long-term debt increased to $30.1 billion from $25.5 billion [9] - The company generated net cash of $3.3 billion from operating activities, compared to $2 billion in the prior-year quarter, with capital expenditure totaling $374 million [9] 2025 Guidance - For 2025, Honeywell expects sales in the range of $40.7-$40.9 billion, slightly lower than the previous projection of $40.8-$41.3 billion, with organic sales expected to increase approximately 6% [12] - The company anticipates a segment margin of 22.9-23.0%, indicating a slight increase year over year, and adjusted EPS is expected to be between $10.60 and $10.70, reflecting a 7-8% year-over-year increase [13]