Honeywell has announced its financial results for the third quarter of 2025, reporting sales growth that met or exceeded company expectations. The company also raised its full-year organic growth and adjusted earnings per share guidance ranges, while updating its free cash flow projections to reflect the upcoming spin-off of its advanced materials business.
For the third quarter, Honeywell recorded a year-over-year sales increase of 7% and organic sales growth of 6%. Growth was driven by double-digit increases in commercial aftermarket as well as defense and space segments. Operating income fell by 6%, but segment profit rose 5% to $2.4 billion, primarily due to gains in Energy and Sustainability Solutions and Building Automation. Operating margin narrowed by 220 basis points to 16.9%, while segment margin declined by 50 basis points to 23.1%. Earnings per share for the quarter reached $2.86, marking a 32% increase from the previous year, with adjusted earnings per share up 9% at $2.82. Operating cash flow rose sharply by 65% to $3.3 billion, though free cash flow decreased by 16% to $1.5 billion compared with last year.
“As we progressed toward separating into three industry-leading public companies, we drove strong financial results and unlocked new value creation opportunities during the third quarter,” said Vimal Kapur, chairman and chief executive officer of Honeywell. “Increased orders across our business segments pushed the company’s total backlog to another record high and reinforced the benefit of the new, innovative solutions we are delivering for customers. All of this translated to us exceeding the high end of our guidance for both organic growth and adjusted earnings per share in the quarter.”
Kapur continued: “Looking ahead, we are well positioned to continue building on our momentum and value creation efforts in the fourth quarter. Today, we are raising our full-year 2025 adjusted earnings per share guidance even while separating Solstice Advanced Materials at the end of October. We will remain focused on our compelling opportunities to deliver outcomes-based solutions to customers and are encouraged by the recent execution of our connected offerings through our Honeywell Forge platform, driving increased recurring revenue in our portfolio.”
Following these results and management’s outlook for the rest of the year, Honeywell updated its full-year forecasts for sales, segment margin, adjusted earnings per share, and free cash flow. The guidance now accounts for Solstice Advanced Materials’ spin-off scheduled for October 30, which is expected to reduce annual sales by $0.7 billion, adjusted earnings per share by $0.21, and free cash flow by $0.2 billion.
The company now expects full-year sales between $40.7 billion and $40.9 billion with organic sales growth around 6%. Segment margin is projected at between 22.9% and 23%, representing an expansion over last year by up to 40 basis points. Adjusted earnings per share are forecasted at $10.60–$10.70—an increase from prior guidance—and operating cash flow is expected between $6.4 billion and $6.8 billion; free cash flow should range from $5.2 billion to $5.6 billion.
Excluding effects from a Bombardier agreement signed in late 2024, Honeywell anticipates approximately 5% organic sales growth with a slight decline in segment margin but an approximate increase of adjusted earnings per share by about 3%. When excluding both this agreement’s impact as well as that from Solstice Advanced Materials’ spin-off in October, adjusted earnings per share growth is expected at about 5–6%.
Earlier this year Honeywell’s Board completed a review that led it to pursue separation into three distinct publicly listed companies focused on Automation (with new segments: Building Automation; Process Automation & Technology; Industrial Automation) and Aerospace businesses—steps set for completion in late-2026.
In preparation for these changes:
– The company reorganized automation operations into three reporting segments starting first quarter next year.
– In October it divested legacy Bendix asbestos liabilities; together with July’s termination of an indemnification agreement related to environmental liabilities—which brought Honeywell $1.6 billion—these moves aim to streamline operations.
– In July strategic alternatives were initiated for productivity solutions/services plus warehouse/workflow units.
– During Q3 Quantinuum secured over $600 million at a pre-money valuation of $10 billion supporting quantum computing development.
By segment:
– Aerospace Technologies saw organic sales rise by 12%, supported mainly by commercial aftermarket (up19%) and defense/space (up10%). Original equipment returned to growth due largely higher shipment volumes.
– Industrial Automation posted modest organic sales growth (1%) amid strength in healthcare sensors but faced challenges such as weak European demand.
– Building Automation achieved a 7% organic rise; building products showed robust fire product performance.
– Energy & Sustainability Solutions experienced a slight drop (-2%), though advanced materials grew within this area offsetting declines elsewhere.
Honeywell will discuss these results during an investor call at www.honeywell.com/investor. A webcast replay will be available for thirty days after broadcast.
The company noted that some metrics discussed are non-GAAP measures intended as additional context alongside standard accounting figures.
For more information about Honeywell or access additional disclosures—including regulatory filings—visit honeywell.com/newsroom or honeywell.com/investor.
