Honeywell Technologies Raises 2026 Outlook as Q3 Adjusted EPS Rises 34%

Honeywell Technologies reported third-quarter 2026 sales of $4,994 million on October 22, 2026, up 1% as reported and 7% on an organic basis from $4,929 million a year earlier, and raised its full-year 2026 outlook for organic revenue, adjusted earnings per share, and free cash flow. The Charlotte, North Carolina-based company said in its third-quarter earnings release that adjusted EPS rose 34% year over year to $2.27.

Sales growth was driven by broad-based strength across all three segments, pricing actions, and continued demand across key end markets, the company said. Backlog increased 7% year over year to nearly $19 billion, excluding the Warehouse and Workflow Solutions and Productivity Solutions and Services divestitures in the third quarter of 2026.

Operating income increased 79% to $740 million, and operating margin of 14.8% expanded 640 basis points from 8.4% in the prior-year quarter. Segment profit rose 23% to $1,062 million, and segment margin of 21.3% expanded 370 basis points from 17.6%, led by Industrial Automation and Building Automation. The company attributed the profit and margin gains to productivity, including the elimination of stranded costs related to prior spin-offs and divestitures, pricing actions that more than offset inflation, and volume leverage.

Reported earnings per share from continuing operations fell 20% to $2.40 from $2.99, primarily due to a one-time gain from the Resideo termination agreement in the prior year. Excluding that and other items, adjusted EPS increased 34% to $2.27 from $1.70, driven by organic sales growth, higher segment profit, and lower net interest expense. Operating cash flow of $607 million decreased 74% from $2,306 million, primarily because of the one-time settlement from the Resideo termination agreement in the prior year, while free cash flow of $688 million increased 15% from $599 million, with free cash flow conversion of 95%, driven by higher operating income and lower capital expenditures.

Segment Results

Building Automation sales were $2,020 million, up 8% as reported and 8% organically from $1,878 million in the third quarter of 2025. Building products grew 11%, fueled by the fire and security businesses, while building solutions grew 4% on continued strength in services. Segment profit increased 9% to $546 million from $502 million, and segment margin expanded 30 basis points to 27.0% from 26.7%, benefiting from volume leverage and pricing actions that offset inflation, according to the release.

Process Automation and Technology sales increased 16% as reported and 8% organically to $1,859 million from $1,598 million. Project sales grew 14%, led by continued growth in LNG and petrochemical projects, while aftermarket sales grew 4%, driven primarily by refining demand. Segment profit rose 6% to $412 million from $389 million, while segment margin contracted 210 basis points to 22.2% from 24.3%. The company said the margin contraction came as expected, driven by project mix and dilution from the acquisition of Johnson Matthey’s Catalyst Technologies business.

Industrial Automation sales declined 23% as reported to $1,115 million from $1,450 million but grew 4% organically, led by 16% growth in solutions, driven primarily by industrial measurement and utilities. Products were flat year over year, with double-digit growth in sensing largely offset by industry-wide meter deployment deferrals in utilities. Segment profit fell 5% to $205 million from $216 million, while segment margin expanded 350 basis points to 18.4% from 14.9%, driven primarily by price and productivity actions partially offset by inflation.

Raised Full-Year 2026 Guidance

Honeywell Technologies raised its full-year 2026 sales guidance to a range of $20.0 billion to $20.1 billion from $19.8 billion to $20.0 billion, with organic sales growth now expected at 4% to 5%, up from 3% to 4% previously. The company expects organic growth of 5% to 6% in the fourth quarter of 2026.

Segment margin is now expected at approximately 20.5%, the upper end of the previous 20.1% to 20.5% range, representing expansion of approximately 290 basis points; previous guidance called for expansion of 250 to 290 basis points. Adjusted EPS guidance increased to a range of $8.40 to $8.45 from $8.05 to $8.35, representing growth of 30% to 31%, up from 25% to 29% previously, and the company said the new range stands $0.23 above the midpoint of the prior range. Operating cash flow guidance was unchanged at approximately $2.1 billion, while free cash flow guidance rose to approximately $2.1 billion from approximately $2.0 billion.

The release identifies segment profit, segment margin, organic sales growth, free cash flow, free cash flow conversion, and adjusted EPS as non-GAAP financial measures. The company said it does not present a guidance range for, or a reconciliation to, the nearest GAAP measures of operating margin or EPS for segment margin and adjusted EPS because management cannot reliably predict or estimate, without unreasonable effort, the impact and timing of items excluded from those measures. For historical periods, free cash flow adjusts for capital expenditures, separation-related cost payments, the Resideo indemnification and reimbursement agreement termination payment, the cash payment for settlement of the divestiture of asbestos liabilities, and cash flows attributable to Quantinuum, according to the release.

Chairman and Chief Executive Officer Vimal Kapur said the third quarter marked the company’s first as a standalone company. “Continued momentum across all three segments, together with our improving position in high-growth verticals, translated to 7% organic sales growth, above the three-year target set at our June Investor Day,” Kapur said. He said continued progress reducing fixed costs enabled adjusted operating income to increase at more than three times the rate of sales and that adjusted EPS of $2.27 was well ahead of the company’s expectations for the quarter. Kapur said the raised full-year outlook gives him confidence in the company’s long-term strategy and its ability to deliver on its 2029 targets.

Honeywell Technologies describes itself as a global, pure-play automation company serving the building, industrial, and process sectors, with more than 50,000 employees and a portfolio underpinned by its Accelerator operating system and Forge intelligence layer. The company scheduled an investor conference call for 8:30 a.m. Eastern Daylight Time on October 22, 2026, to discuss the results and full-year guidance, with a live webcast and presentation materials available through the investor relations section of its website and a replay available for 30 days following the presentation.