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FY2026 Q1
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Honeywell International Inc. earnings call
Buzzberg read
Aerospace spinoff accelerated to June 29th
Honeywell Q1 2026 results slightly beat expectations on margin and EPS, but organic revenue growth was modest due to aerospace supply chain snags and Middle East conflict disruptions. Management maintained full-year guidance, citing strong order backlogs and a second-half ramp in Process Automation and Aerospace, while advancing the aerospace spin-off to June 29th. Adjusted EPS of $2.45 beat guidance, segment margin of 23.3% expanded 90bps; organic sales grew only 2%.
Buzzberg read Aerospace spinoff accelerated to June 29th Honeywell Q1 2026 results slightly beat expectations on margin and EPS, but organic revenue growth was modest due to aerospace supply chain snags and Middle East conflict disruptions. Management maintained full-year guidance, citing strong order backlogs and a second-half ramp in Process Automation and Aerospace, while advancing the aerospace spin-off to June 29th. Adjusted EPS of $2.45 beat guidance, segment margin of 23.3% expanded 90bps; organic sales grew only 2%. Read full analysisCollapse analysis
Honeywell Q1 2026 results slightly beat expectations on margin and EPS, but organic revenue growth was modest due to aerospace supply chain snags and Middle East conflict disruptions. Management maintained full-year guidance, citing strong order backlogs and a second-half ramp in Process Automation and Aerospace, while advancing the aerospace spin-off to June 29th. Adjusted EPS of $2.45 beat guidance, segment margin of 23.3% expanded 90bps; organic sales grew only 2%.
- Aerospace supply chain issue was acute and supplier-specific in Jan/Feb, but recovered in March; full-year high single-digit growth reaffirmed.
- Process Automation backlog up 22% with double-digit orders; second-half ramp to high single-digit growth expected.
- Middle East conflict caused ~0.5% revenue impact in Q1 and ~1% expected in Q2; management assumes conflict persists through Q2.
Revenue$9.143B+33% QoQ
EPS$2.58-50% QoQ
Gross margin38.71%Reported
Operating margin9.69%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Supply Chain
Supply chain constraints acute but recovery underway
Demand
Process technology backlog up 22% on strong orders
Show 3 more callouts
Geopolitics
Middle East conflict trimmed Q1 revenue, but long-term opportunity
Demand
Aerospace demand robust despite supply constraints
Demand
LNG and petrochemical project wins fuel confidence
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $9.143B | +33% QoQ |
| EPS | $2.58 | -50% QoQ |
| Gross margin | 38.71% | Reported |
| Operating margin | 9.69% | Reported |
| Free cash flow | $-0.873B | Reported |
| Capex | $0.223B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| EPS | FY2026 Q2 | $2.40 | $2.40 | Initiated |
| Operating margin | FY2026 | 22.7%–23.1% | 22.9% | Maintained |
| Operating margin | FY2026 Q2 | 22.2%–22.5% | 22.35% | Initiated |
| Revenue | FY2026 Q2 | 2%–4% | 3% | Initiated |
| Revenue | FY2026 | 3%–6% | 4.5% | Maintained |
AI, capex & demand read
Management read
Confident
Management reaffirmed full-year guidance despite geopolitical and supply chain headwinds, citing strong backlog, order momentum, and progress on portfolio transformation.
Investment and capacity
Honeywell has invested more than $1 billion over the past three years into expanding the capacity and resiliency of its supply chain, and 2026 guidance incorporates continued elevated spending focused on onboarding new suppliers, developing internal capabilities, and assisting suppliers with engineering and operations.
all 1 named companies below
Companiesreturns since call
Supply chain
Supply chain
Vimal Kapoor
Brady Corporation is acquiring Honeywell's productivity solutions and services business, a divestiture that simplifies Honeywell's portfolio ahead of its aerospace spin-off.
Evidence
“We announced we signed agreement to sell productivity solution and services to Brady Corporation and warehouse and workflow business to American industrial partners into all cash transactions.”
External signals
Supply-chain alpha · 2returns since call
Aerospace supply chain issue in Q1 was acute and supplier-specific, not demand-driven, and recovery began by March, with output momentum carrying into April.
Evidence
“It was a very acute transitory issue, specifically with some key suppliers in the mechanical space that adversely affected both our engines business and our control systems business.”
Process Automation Technology backlog grew 22% year-over-year driven by three consecutive quarters of strong orders, supporting a high single-digit revenue ramp in the second half of 2026.
Evidence
“process technology orders increased double-digit, driving a 22% increase in P&T backlog. we remain on track on expected second half ramp as LNG and large modular equipment deeds convert to sales in the back half of the year”
Methodology & coverage
Management-only analysis. All 1 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.