Honeywell Aerospace Inc. HONA reported third-quarter 2026 adjusted earnings of $2.21 per share, which beat the Zacks Consensus Estimate of $1.90 by 16.3%.
HONA’s Q3 Sales Discussion
Revenues increased 2.4% year over year to $4.64 billion, surpassing the consensus estimate of $4.59 billion by 1.1%. Backlog grew 12% to $19.32 billion, supported by a 9% increase in trailing 12-month orders.
Commercial Original Equipment sales increased 7% year over year to $690 million. Organic sales grew 8%, driven by higher commercial air transport production rates and increased demand for selectable aircraft equipment.
Commercial Aftermarket sales rose 2% to $2.13 billion, supported by healthy underlying demand and aircraft returning to active service. Third-quarter orders increased 12% year over year.
Defense and Space revenues increased 1% to $1.83 billion. Robust growth driven by the CAES and Civitanavi acquisitions was partly tempered by supply-chain constraints limiting international deliveries and the phaseout of a restricted government program.
Honeywell Aerospace inc. Price, Consensus and EPS Surprise
Honeywell Aerospace inc. price-consensus-eps-surprise-chart | Honeywell Aerospace inc. Quote
HONA’s Segment Performance Stays Mixed
Electronic Solutions sales increased 4% year over year to $1.78 billion, with organic growth of 5%. Strength in Commercial Original Equipment and Defense and Space supported the improvement. Segment adjusted EBIT rose 11% to $564 million as tariff refunds and pricing gains more than offset unfavorable sales mix and higher costs.
Engines & Power Systems sales increased 3% to $1.52 billion, driven by higher Commercial Aftermarket volumes. Organic sales advanced 2%. However, segment adjusted EBIT declined 16% to $250 million as unfavorable mix and higher costs outweighed pricing benefits and tariff refunds.
Control Systems revenues remained relatively flat at $1.35 billion. Defense and Space growth was offset by weaker Commercial Aftermarket sales. Segment adjusted EBIT increased 2% to $382 million as favorable pricing more than compensated for higher costs and unfavorable mix.
HONA's Profitability Benefits From Tariff Refunds
Adjusted EBIT increased 0.9% year over year to $1.16 billion from $1.15 billion. The adjusted EBIT margin contracted 40 basis points to 25%, reflecting unfavorable sales mix and incremental standalone operating costs.
Results included approximately $50 million in net tariff refund benefits, which contributed more than 100 basis points to adjusted EBIT margin. Reported net income increased 12.7% to $737 million from $654 million.
HONA’s Financial Position
HONA generated $668 million in operating cash flow during the third quarter compared with $839 million a year earlier. Capital expenditures totaled $168 million, resulting in free cash flow of $500 million.
Cash and cash equivalents amounted to $1.56 billion as of Sept. 26, 2026, compared with $213 million as of 2025-end. Long-term debt totaled $15.85 billion, reflecting financing transactions associated with the company's separation from Honeywell.
HONA Raises 2026 Earnings Outlook
Management raised its full-year 2026 pro forma standalone adjusted earnings guidance to $7.85-$8.00 per share from $7.60-$7.90. The Zacks Consensus Estimate is pinned at $7.77 per share, which is lower than the company’s newly guided range.
The company maintained its organic sales growth outlook of 4-5%.
Pro forma standalone adjusted EBIT is now projected to be $4.375-$4.425 billion compared with the previous guidance of $4.35-$4.45 billion.
HONA’s Zacks Rank
The company currently has a Zacks Rank #5 (Strong Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Hexcel Corporation HXL reported third-quarter 2026 adjusted earnings of 50 cents per share, which improved 35.1% from the year-ago quarter’s figure of 37 cents. The bottom line surpassed the Zacks Consensus Estimate of 48 cents by 4.2%.
HXL’s net sales totaled $496.4 million, which missed the Zacks Consensus Estimate of $500 million by 0.8%. The top line, however, witnessed an improvement of 8.8% from the year-ago quarter’s figure of $456.2 million.
RTX Corporation’s RTX third-quarter 2026 adjusted earnings per share (EPS) of $2.26 beat the Zacks Consensus Estimate
of $1.78 by 27%. The bottom line improved 32.9% from the year-ago quarter’s level of $1.70.
RTX’s revenues rose 11.1% year over year to $24.97 billion and beat the consensus mark of $24.01 billion by 4%. Growth was supported by higher commercial aftermarket and defense demand.
Lockheed Martin Corporation LMT reported third-quarter 2026 adjusted earnings of $7.97 per share, which beat the Zacks Consensus Estimate of $7.49 by 6.4%. The bottom line increased 14.7% from the year-ago quarter's reported figure of $6.95.
LMT’s net sales were $20.71 billion, which beat the Zacks Consensus Estimate of $20.44 billion by 1.4%. The top line inched up 11.3% from $18.61 billion reported in the year-ago quarter.
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Honeywell Aerospace inc. (HONA): Free Stock Analysis Report
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