Honeywell reported a mixed first quarter with revenue growth driven by pricing, but significant charges impacted reported earnings and cash flow. The company is advancing its portfolio transformation with planned divestitures and a spin-off, while reaffirming its full-year outlook.
Orders grew 7% organically, leading to a backlog of $38.3 billion, up 2% sequentially.
positiveAdjusted EPS increased 11% to $2.45, driven by segment profit growth and lower share count.
positiveSegment profit increased 6% to $2.1 billion, with segment margin expanding 90 basis points to 23.3% (excluding certain items).
positiveAerospace Technologies sales grew 3% organically, with orders up 6% and a book-to-bill of 1.1x.
positiveBuilding Automation sales grew 8% organically, with orders up 9%.
positiveNet income from continuing operations decreased 35% to $795 million, impacted by charges related to debt restructuring, impairment of assets held for sale, repositioning, and separation-related items.
negativeOperating income decreased 14% to $1,474 million, and operating margin contracted 320 basis points to 16.1% due to impairment charges and higher repositioning/divestiture costs.
negativeOperating cash flow from continuing operations was ($650) million, a 272% decrease year-over-year, due to higher spin-off and separation-related cost payments and a litigation settlement payment.
negativeFree cash flow was $56 million, down 71% year-over-year, primarily due to timing of collections and litigation settlement payments.
negativeProcess Automation and Technology sales decreased 6% organically, driven by declines in aftermarket and delays in refining catalyst shipments and automation service upgrades.
attentionIndustrial Automation sales declined 11% reported, though organic growth was 1%.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total | CC |
|---|---|---|---|---|---|
Aerospace Technologies | N/A | — | — | — | +3.0% |
Building Automation | N/A | — | — | — | +8.0% |
Process Automation and Technology | N/A | — | — | — | -6.0% |
Industrial Automation | N/A | — | — | — | +1.0% |
| Total Revenue | $0.00M | — | — | 100.0% | — |
Segment performance shows business unit health and growth drivers. Constant currency (CC) removes FX impact for like-for-like comparison.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
Special items are non-recurring events that may distort period-over-period comparisons. Analysts typically adjust for these when calculating normalized earnings.
Honeywell delivered a strong start to the year while navigating a challenging geopolitical environment. Orders were up 7% with growth in all segments, pushing backlog to over $38 billion, led by buildings and industrial automation.
Through our relentless focus on productivity and execution, we generated 90 basis points of segment margin expansion. This profitable growth, coupled with an acceleration in stranded costs takeout, drove 11% adjusted earnings growth, overcoming the impacts of rising inflation and the disruption in the Middle East. This is a testament to the resiliency of the Honeywell portfolio.
This quarter, we took the final steps to conclude our multi-year portfolio transformation with our announcements to sell Productivity Solutions and Services and Warehouse and Workflow Solutions, both of which are expected to close in the second half of 2026.
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Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.