Honeywell(US:HON) ZACKS·2026-01-29 17:55Core Insights - Honeywell International Inc. reported fourth-quarter 2025 adjusted earnings of $2.59 per share, exceeding the Zacks Consensus Estimate of $2.53, with a year-over-year increase of 17% on an adjusted basis. Reported earnings were 49 cents per share, down 72% year over year due to a one-time impairment charge related to certain business classifications [1][10]. Revenue Performance - Total revenues for the fourth quarter were $9.8 billion, missing the consensus estimate of $10.07 billion, but reflecting a 6% increase from the previous year, driven by Aerospace Technologies and Building Automation segments. Organic sales rose 11% year over year [2]. - For the full year 2025, net revenues reached $37.4 billion, an 8% increase year over year, with adjusted earnings of $9.78 per share, up 12% year over year [2]. Business Segment Performance - Aerospace Technologies generated quarterly revenues of $4.52 billion, a 13% year-over-year increase, significantly surpassing the Zacks Consensus Estimate of $2.75 billion. Organic sales in this segment increased by 21% year over year, supported by strong demand in commercial aftermarket and defense markets [4]. - Industrial Automation revenues declined by 8% year over year to $2.40 billion, slightly above the consensus estimate of $2.30 billion. Organic sales grew by 1% year over year, with the decline attributed to reduced demand for measurement and controls products [5]. - Building Automation revenues totaled $1.97 billion, up 10% year over year, exceeding the consensus estimate of $1.92 billion. Organic sales increased by 8% year over year, driven by strength in both building solutions and products [6]. - Energy and Sustainability Solutions revenues increased by 10% to $892 million, although organic sales fell by 7% year over year, impacted by decreasing demand for petrochemical catalysts [7]. Cost and Margin Analysis - Total cost of sales was approximately $6.29 billion, an 8.3% increase year over year. Selling, general, and administrative expenses rose by 11.6% to $1.50 billion. Operating income was $996 million, down 34.5% year over year, with an operating income margin of 10.2%, compared to 16.6% in the previous year [8]. Balance Sheet and Cash Flow - As of the end of Q4 2025, Honeywell had cash and cash equivalents of $12.5 billion, up from $9.9 billion at the end of 2024. Long-term debt increased to $27.1 billion from $25.4 billion [11]. - The company generated net cash of $6.4 billion from operating activities, compared to $6.1 billion in the prior year. Capital expenditure totaled $986 million, up from $871 million in the previous year [11]. - Free cash flow for the year was $5.10 billion, reflecting a 20.3% increase from the previous year [12]. 2026 Guidance - For 2026, Honeywell expects sales to be between $38.8 billion and $39.8 billion, with organic sales projected to increase by 3-6%. Adjusted earnings per share are anticipated to be between $10.35 and $10.65, indicating a year-over-year increase of 6-9% [13].