Honeywell International Inc. (NASDAQ:HON) shares fell in premarket trading Thursday after the company reported mixed first-quarter results, with revenue missing expectations despite an earnings beat.

Details

The company posted adjusted earnings of $2.45 per share, exceeding analysts' estimates of $2.32. Revenue rose 2% year over year to $9.14 billion, falling short of the $9.30 billion consensus estimate. Organic sales also increased 2%, supported by pricing actions and new product introductions.

Orders climbed 7% year over year on an organic basis, driven by demand in building and industrial automation, lifting backlog to $38.3 billion. Adjusted segment profit rose 6% to $2.13 billion, while segment margin expanded 90 basis points to 23.3% on favorable pricing and earlier-than-expected removal of stranded costs tied to the planned aerospace spin-off.

Operating cash flow increased to $0.7 billion from $0.4 billion a year earlier, reflecting higher spin-off, separation-related, and litigation settlement payments tied to Flexjet. Free cash flow fell 71% to $0.1 billion, largely due to the timing of collections, partly impacted by the Middle East conflict.

Organic Segment Performance

Across segments, aerospace technologies revenue rose 3% to $4.32 billion, while building automation grew 8% to $1.88 billion. Industrial automation increased 1% to $1.42 billion. Process automation and technology declined 6% to $1.51 billion, though margins improved across all segments.

Outlook

The company said it is maintaining its full-year outlook after a “strong first quarter” despite the uncertainty stemming from the Middle East conflict. 

For fiscal 2026, Honeywell reaffirmed adjusted earnings guidance of $10.35 to $10.65 per share, broadly in line with estimates, and projected revenue of $38.8 billion to $39.8 billion, below the $39.55 billion consensus. The company cut GAAP earnings guidance to $8.88 to $9.18 per share from a prior range of $9.59 to $9.89.

For the second quarter, Honeywell forecast adjusted earnings of $2.35 to $2.45 per share on revenue of $9.4 billion to $9.6 billion, both below analyst expectations.

Dumps Productivity Unit

Separately, Honeywell agreed to sell its Productivity Solutions and Services unit to Brady Corporation (NYSE:BRC) this week for $1.4 billion in cash. The deal, expected to close in the second half of 2026, is part of its portfolio simplification ahead of a planned aerospace spin-off.

Sale of Warehouse and Workflow Solutions Business

The company also said it will divest its Warehouse and Workflow Solutions business to American Industrial Partners. Financial terms were not disclosed. The transaction is expected to close in the second half of 2026, subject to regulatory approvals.

HON Price Action: Honeywell shares were down 5.44% at $208.00 during premarket trading on Thursday, according to Benzinga Pro data.

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