Honeywell Technologies Earnings: Lower Corporate Costs Gave Most of Margin Gain
Honeywell Technologies grew organic sales 7% in its first quarter as a standalone company and raised its 2026 outlook on Thursday. By our calculation, a smaller corporate cost line gave about 2.1 of the 3.7 points its segment margin gained, a new name fee from Honeywell Aerospace 0.7 and the three businesses 0.8, each rounded.
The short answer. The Honeywell left after the aerospace spin-off sells building, plant and factory technology, and organic sales grew in all three of its businesses in the third quarter. Most of the rise in its profit rate came from a smaller corporate cost line, a sign of how a breakup can lift a reported margin while the businesses themselves change little. We split the gain by source and add the name fee Honeywell Aerospace now pays its former parent.
Honeywell Technologies in the third quarter of 2026
What we calculated
- 2.1 of the 3.7 points of segment margin gain from the smaller corporate cost line: the change in Corporate and All Other as a share of sales, with the $36 million trademark fee counted on its own.
- 0.7 points from the name fee: $36 million of trademark licensing income as a share of third quarter sales.
- 0.8 points from the three businesses: their combined segment profit as a share of sales, Q3 2026 against Q3 2025.
- About 16% growth in adjusted EPS with pension income and the Quantinuum loss left in, against the company’s 34%.
- Fourth quarter sales of about $5.0 billion to $5.1 billion at a segment margin near 22%: the full-year outlook less the first nine months.
- $0.35 a quarter per pre-split share: the new $0.70 dividend divided by two, because of the 1-for-2 reverse split.
- Borrowings of $34.6 billion and $16.6 billion: our sum of short-term borrowings, current maturities and long-term debt.
On this page
- What is Honeywell Technologies after the split?
- Honeywell earnings for the third quarter of 2026
- Why did Honeywell’s profit margin jump?
- How much does Honeywell Aerospace pay for its name?
- Are Honeywell’s three businesses growing?
- Honeywell’s raised 2026 guidance
- Honeywell dividend, buybacks and debt after the split
- How we counted
- Frequently asked questions
What is Honeywell Technologies after the split?
Honeywell Technologies is the old Honeywell without its aerospace and chemicals businesses. It makes the controls, sensors and software that run buildings, refineries and factories. By sales it is about half the size of the company that carried the name a year ago.
Honeywell completed the spin-off of Honeywell Aerospace on June 29, 2026. Shareholders of record on June 15 received one Honeywell Aerospace share (ticker HONA) for every two Honeywell shares. On the same day Honeywell combined every two of its own shares into one, which cut its share count from about 634 million to about 317 million.
Solstice Advanced Materials, the chemicals business, had already been spun off on October 30, 2025.
The company now reports three businesses. Building Automation sells fire, security and building control systems and the service work that goes with them. Process Automation and Technology sells control systems and process technology to refineries, LNG plants and petrochemical sites. Since July it also owns the catalyst business it bought from Johnson Matthey. Industrial Automation makes sensors, measurement gear and utility meters.
Show the data
| Part | Value | Share |
|---|---|---|
| Building Automation | $2,020M | 40.4% |
| Process Automation and Technology | $1,859M | 37.2% |
| Industrial Automation | $1,115M | 22.3% |
In the restated figures Honeywell filed in June, the businesses that stayed sold $19.9 billion in 2025 and the ones that left sold $20.7 billion.
The release says the company employs more than 50,000 people. On StockTitan’s market cap data at the October 21 close, Honeywell Technologies was worth about $68 billion and Honeywell Aerospace about $51 billion. You can follow both on the Honeywell overview page.
| Business | Q3 2026 sales | Share of sales | Segment margin |
|---|---|---|---|
| Building Automation | $2,020M | 40% | 27.0% |
| Process Automation and Technology | $1,859M | 37% | 22.2% |
| Industrial Automation | $1,115M | 22% | 18.4% |
| Total | $4,994M | 100% | 21.3% |
Source: Honeywell Technologies Q3 2026 release, Table 2; 2025 split from the June 29, 2026 Form 8-K, Exhibit 99.2; market values from StockTitan data at the October 21, 2026 close.
Honeywell earnings for the third quarter of 2026
Honeywell earned more per share than the Zacks consensus expected and sold slightly less. Sales barely moved on paper because Honeywell sold businesses, while the businesses it kept grew 7%.
Third quarter sales were $4.99 billion, up 1% from a year earlier on the company’s restated basis, according to the release. Organic growth was 7%, a measure that leaves out businesses bought or sold and currency moves.
Adjusted EPS came in at $2.27, up 34%, on Honeywell’s measure that removes items it treats as outside normal operations. The Zacks consensus had called for $2.17. That same consensus expected $5.01 billion in sales, so profit beat and sales fell a little short.
Reported EPS from continuing operations fell 20% to $2.40, because the 2025 quarter held a one-time gain from ending an agreement with Resideo.
Free cash flow rose 15% to $688 million on Honeywell’s definition, which adds back $158 million of separation payments. Cash from operations less equipment spending was $530 million, by our subtraction.
The 34% also depends on what Honeywell leaves out. Some items in its reconciliation pull in opposite directions. Honeywell removes pension income and adds back its share of losses at the quantum computing company Quantinuum. With both left in, our calculation gives $2.13 against $1.84, a rise of about 16%. Honeywell credits the 34% to organic growth, higher segment profit and lower interest costs.
| Measure | Q3 2026 | Q3 2025 | Change |
|---|---|---|---|
| Sales | $4,994M | $4,929M | +1% (organic +7%) |
| Operating income | $740M | $413M | +79% |
| Operating margin | 14.8% | 8.4% | +6.4 pts |
| Segment profit | $1,062M | $866M | +23% |
| Segment margin | 21.3% | 17.6% | +3.7 pts |
| EPS, continuing operations | $2.40 | $2.99 | -20% |
| Adjusted EPS (company measure) | $2.27 | $1.70 | +34% |
| Adjusted EPS with pension income and Quantinuum loss left in (our calculation) | $2.13 | $1.84 | +16% |
| Cash from operations, continuing | $607M | $2,306M | -74% |
| Free cash flow (company definition) | $688M | $599M | +15% |
Source: Honeywell Technologies Q3 2026 release, Table 1, the EPS reconciliation (pension income $0.21 and $0.18 a share; Quantinuum $0.35 and $0.04 a share) and the free cash flow reconciliation (capital expenditures $77M, separation payments $158M). The 2025 cash from operations included a $1,590M Resideo payment. Consensus as compiled by Zacks before the release.
Why did Honeywell’s profit margin jump?
Out of every $100 of sales, Honeywell kept about $3.70 more as segment profit than a year earlier. By our calculation, more than half of that showed up in a smaller corporate cost line, and the rest came from the name fee and the businesses.
Segment margin is Honeywell’s main profit measure, segment profit divided by sales, with items such as amortization and stock pay left out. It rose from 17.6% to 21.3%, the release shows.
Honeywell’s segment table splits that profit into the three businesses and a line called Corporate and All Other. That line holds head office costs and items not assigned to a business, and the release does not break them down. It cost a net $101 million in the quarter, against $241 million a year earlier.
Honeywell’s June filing explains part of the old figure. In the restated history, Corporate keeps the head office costs once charged to the aerospace and chemicals businesses that could not move out with them. The release calls them stranded costs. It credits the profit gain to “productivity, including elimination of stranded costs related to prior spin-offs and divestitures,” along with pricing that more than offset inflation and higher volume.
Honeywell gives no line for the $36 million name fee. We count it on its own, the reading that gives the corporate line its smallest share, and the corporate line still holds most of the gain on any reading.
Show the data
| Category | Company segment margin | Three businesses, before corporate costs | Note |
|---|---|---|---|
| Q1 2024 | 15.9% | 20.6% | |
| Q2 2024 | 15.9% | 21.6% | |
| Q3 2024 | 17.9% | 22.8% | |
| Q4 2024 | 19.0% | 23.2% | |
| Q1 2025 | 16.7% | 20.7% | |
| Q2 2025 | 18.0% | 22.4% | |
| Q3 2025 | 17.6% | 22.5% | |
| Q4 2025 | 18.0% | 22.5% | Solstice Advanced Materials spun off on October 30, 2025 |
| Q1 2026 | 19.6% | 22.7% | |
| Q2 2026 | 19.0% | 22.6% | |
| Q3 2026 | 21.3% | 23.3% | First quarter after the Honeywell Aerospace spin-off |
The three businesses, before corporate costs, earned between 22.4% and 23.3% of sales in each of the last six quarters. The company figure climbed from 18.0% to 21.3% over the same stretch as the gap between the two lines narrowed.
Our reading is that a cost that has gone keeps helping the profit level, but stops adding to growth once the year-ago quarter also lacks it. Honeywell’s own three-year goal, set at its June investor day, is “more than 60 basis points of margin expansion annually,” a basis point being a hundredth of a percentage point. For 2026 the release expects about 290. How much of the corporate improvement is permanent is a question for the earnings call.
| Part of segment profit | Q3 2025 | Q3 2026 | Change | Margin points (our calculation) |
|---|---|---|---|---|
| Building Automation | $502M | $546M | +$44M | +0.8 combined |
| Process Automation and Technology | $389M | $412M | +$23M | |
| Industrial Automation | $216M | $205M | -$11M | |
| Trademark licensing income | none | $36M | +$36M | +0.7 |
| Corporate and All Other, fee counted separately | -$241M | -$137M | +$104M | +2.1 |
| Total segment profit | $866M | $1,062M | +$196M | +3.7 |
Source: Honeywell Technologies Q3 2026 release, segment data and the reconciliation of operating income to segment profit; restated quarters from the June 29, 2026 Form 8-K, Exhibit 99.2 and the Q2 2026 release. Margin points are rounded and sum to 3.7 before rounding. Stock compensation, which segment profit leaves out, was $104M against $22M; with it included, our calculation gives a margin of 19.2% against 17.1%.
How much does Honeywell Aerospace pay for its name?
Honeywell Aerospace owes its former parent $18.75 million a month in license fees until May 2031 for the Honeywell Aerospace name. Honeywell Technologies booked $36 million of trademark licensing income in the third quarter.
The trademark license, filed with the June 29 Form 8-K, sets fees of $1.125 billion in total. Honeywell Aerospace owed $18.75 million up front and 59 monthly payments of the same size, the last due by May 19, 2031. The fees are owed whether or not it uses the name.
The license itself runs longer. Its first term lasts six years from the spin-off and then renews automatically unless Honeywell Aerospace gives notice, the agreement shows.
Honeywell Technologies counts the $36 million inside segment profit, the release shows. That is worth about 0.7 points of margin, by our calculation.
The same payment looks different from the other side. Honeywell Aerospace leaves “expenses associated with the Honeywell trademark license” out of its own segment profit and adjusted EBIT, according to its second quarter release. So one company’s headline profit measure includes the fee and the other’s leaves it out.
Are Honeywell’s three businesses growing?
Yes, on an organic basis, which sets aside the businesses Honeywell bought and sold. Buildings and plant projects grew fastest, and the profit rates of the businesses moved in opposite directions for reasons the company gives.
Building Automation grew 8% organically, led by fire and security products, and its margin edged up. Process Automation and Technology also grew 8%, on LNG and petrochemical projects.
That second business saw its margin fall 2.1 points to 22.2%. Honeywell puts it down to project mix and dilution from the catalyst business it bought from Johnson Matthey in July.
Show the data
| Item | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Building Automation | 26.7% | 27.0% | +0.3 pts |
| Process Automation and Technology | 24.3% | 22.2% | -2.1 pts |
| Industrial Automation | 14.9% | 18.4% | +3.5 pts |
| Honeywell Technologies | 17.6% | 21.3% | +3.7 pts |
Industrial Automation is the reverse case. Its reported sales fell 23% after Honeywell sold its Warehouse and Workflow Solutions and Productivity Solutions and Services units, yet organic sales grew 4%.
Its margin rose 3.5 points to 18.4%, which the company credits to price and productivity. The release does not say how much of the rise came from shedding the sold units. Utility meter sales were held back by what Honeywell calls “industry-wide meter deployment deferrals.”
Among automation peers, 7% is above Emerson’s 6% underlying growth for the June quarter. It is below Rockwell Automation’s 10% for that quarter and ABB’s 14% for the September quarter, each on the company’s own definition. Honeywell grew, but not the fastest.
Honeywell’s backlog of orders still to fill was nearly $19 billion, up 7% excluding the sold units.
| Business | Reported sales change | Organic change | Margin Q3 2025 | Margin Q3 2026 |
|---|---|---|---|---|
| Building Automation | +8% | +8% | 26.7% | 27.0% |
| Process Automation and Technology | +16% | +8% | 24.3% | 22.2% |
| Industrial Automation | -23% | +4% | 14.9% | 18.4% |
Source: Honeywell Technologies Q3 2026 release, Table 2 and the organic sales reconciliation. Peers: Rockwell Automation fiscal Q3 2026 release (organic), Emerson fiscal Q3 2026 release (underlying), ABB Q3 2026 results (comparable revenues).
Honeywell’s raised 2026 guidance
Honeywell now expects adjusted EPS of $8.40 to $8.45 this year, the second time it has raised that forecast since the split. The forecast implies a higher profit rate in the last three months than in the third quarter.
The new outlook puts the segment margin at about 20.5%, the top of the old range, and adjusted EPS 30% to 31% above 2025. It also raises the forecasts for organic growth and free cash flow.
Show the data
| Item | Low | High | Value |
|---|---|---|---|
| July 8, 2026 | $7.90 | $8.30 | $8.10 |
| July 23, 2026 | $8.05 | $8.35 | $8.20 |
| October 22, 2026 | $8.40 | $8.45 | $8.43 |
Subtracting the first nine months from the full-year targets, our calculation gives fourth quarter sales of about $5.0 billion to $5.1 billion at a segment margin near 22%. On the restated basis the fourth quarter of 2025 was 18.0%, and the release does not split the expected rise between the businesses and corporate costs.
Even at about 20.5% for the year, the new company keeps less of each sales dollar than the whole of Honeywell did in 2025. Its January release reported a 21.7% segment margin for that year, 22.5% on its adjusted basis, with the higher-margin aerospace business still inside.
| 2026 outlook | July 8 | July 23 | October 22 |
|---|---|---|---|
| Sales | $19.9B to $20.2B | $19.8B to $20.0B | $20.0B to $20.1B |
| Organic growth | 2% to 3% | 3% to 4% | 4% to 5% |
| Segment margin | 19.8% to 20.3% | 20.1% to 20.5% | about 20.5% |
| Adjusted EPS | $7.90 to $8.30 | $8.05 to $8.35 | $8.40 to $8.45 |
| Free cash flow | about $2.0B | about $2.0B | about $2.1B |
| Fourth quarter organic growth | not given | not given | 5% to 6% |
Source: July 8 guidance update (the June outlook restated for the reverse split), Q2 2026 release, Q3 2026 release Table 3 (segment margin expansion of about 290 basis points; 2025 adjusted EPS $6.46). Investor day goal from the June 11, 2026 release.
Honeywell dividend, buybacks and debt after the split
Each share held before the split now brings in $0.35 a quarter from Honeywell Technologies, against $1.19 before the spin-off. Holders also kept their Honeywell Aerospace shares, which have paid no dividend so far.
The new dividend is $0.70 per Honeywell Technologies share, and two old shares became one new share in the reverse split. The board declared the latest $0.70 dividend on September 25, payable December 4 to holders of record on November 13.
The last dividend of the old company was $1.19 a share, declared April 27 and paid June 5, before the spin-off and the reverse split. The September 25 release does not say how the new amount was set.
Honeywell Aerospace has declared no dividend in its releases through October 22. Its information statement says it expects to pay regular dividends “in line with our peers,” and its board approved a $3.5 billion buyback in July.
An investor who held 200 Honeywell shares on the June 15 record date received 100 Honeywell Aerospace shares and, after the reverse split, holds 100 Honeywell Technologies shares. Those pay $70 a quarter, against $238 a quarter on the 200 old shares at $1.19.
Honeywell Technologies bought back no stock in the third quarter, after $1.0 billion in the first half, and the release names no new buyback plan. Diluted shares averaged 319.2 million, against 319.4 million a year earlier on a split-adjusted basis, so buybacks did little for EPS.
Borrowings were $16.6 billion at September 30, against $34.6 billion at the end of 2025, a figure that still included debt that left with the spin-off.
In the nine months the cash flow statement shows a $15.8 billion inflow it labels pre-separation funding and $14.7 billion of long-term debt repaid. Net interest cost fell to $93 million from $178 million, which helped adjusted EPS.
| Item | December 31, 2025 | September 30, 2026 |
|---|---|---|
| Commercial paper and short-term borrowings | $5,893M | $2,424M |
| Current maturities of long-term debt | $1,541M | $3,783M |
| Long-term debt | $27,137M | $10,386M |
| Total borrowings (our sum) | $34,571M | $16,593M |
| Cash and cash equivalents | $12,273M | $5,694M |
Source: Honeywell Technologies Q3 2026 release, balance sheet and cash flow statement (pre-separation funding $15,835M and long-term debt repayments $14,688M in the nine months; net interest is interest and other financial charges less interest income). The December 2025 figures include debt that left with the spin-off.
What to watch
- How much of the smaller corporate cost line is permanent: the replay and slides of the October 22 earnings call, on the Honeywell investor site for 30 days.
- Which line of segment profit holds the $36 million trademark fee, and how the amount booked in the quarter relates to the $18.75 million monthly payments: Honeywell’s quarterly report on Form 10-Q for the third quarter.
- How the other side books the name fee and whether it starts a dividend: Honeywell Aerospace’s third quarter results, after the close on October 28.
How we counted
Margin points are each part’s segment profit divided by net sales from continuing operations ($4,994 million in Q3 2026, $4,929 million in Q3 2025), then the change between the two quarters. The three businesses earned $1,163 million against $1,107 million, or 23.3% and 22.5% of sales, a gain of 0.83 points. The $36 million fee is 0.72 points.
The Corporate and All Other line was minus $101 million against minus $241 million. Honeywell gives no line for the fee, so we took it out of the corporate line and counted it alone. That gives the corporate line its smallest share: minus $137 million (2.74% of sales) against minus $241 million (4.89%), or 2.15 points. If the fee sat in a business instead, the corporate line would explain 2.87 points.
The quarterly series uses the restated quarters of the June 29, 2026 Form 8-K, Exhibit 99.2. Q2 2026 corporate costs are total segment profit minus the three businesses, from the Q2 2026 release. The adjusted EPS check adds back pension income and subtracts the Quantinuum line in each quarter.
The fourth quarter estimate takes about 20.5% of $20.0 billion to $20.1 billion, subtracts nine-month segment profit of $2,991 million, and divides by full-year sales less nine-month sales of $15,004 million. Dividend per pre-split share is the new dividend divided by two. Cash from operations less equipment spending is $607 million less $77 million.
Frequently asked questions
What does Honeywell Technologies do?
It makes automation for buildings, process plants and factories. Its products range from fire and security systems and building controls to catalysts for refineries and LNG plants, sensors and utility meters. It is what remained of Honeywell after the aerospace and chemicals businesses were spun off, and it trades as HON.
Did Honeywell beat earnings expectations in Q3 2026?
On adjusted EPS, yes. It reported $2.27 against $2.17 in the Zacks consensus. Sales of $4.99 billion were slightly below the $5.01 billion that consensus expected.
Did Honeywell cut its dividend after the split?
Per share held before the split, yes. The new quarterly dividend is $0.70 per Honeywell Technologies share, which is $0.35 for each pre-split share after the 1-for-2 reverse split, against $1.19 before. Honeywell Aerospace, whose shares holders also received, has not declared a dividend.
Do Honeywell shareholders still own Honeywell Aerospace?
Holders who kept their shares do. On June 29, 2026, Honeywell distributed one Honeywell Aerospace share for every two Honeywell shares held on the June 15 record date, and Honeywell Aerospace now trades on its own as HONA.
What is Honeywell’s 2026 guidance?
As of October 22, 2026, Honeywell expects adjusted EPS of $8.40 to $8.45 and sales of $20.0 billion to $20.1 billion. It also expects organic growth of 4% to 5%, a segment margin of about 20.5% and free cash flow of about $2.1 billion.
Where can I find Honeywell releases and filings on StockTitan?
The HON overview page collects Honeywell Technologies releases and filings, and the HON financials page carries its reported figures. The dividend yield calculator turns a dividend and a price into a yield. For how share combinations work, see the guide to forward and reverse stock splits, and for another breakup this month, the Abbott nutrition spin-off.
Sources
- Honeywell Technologies, third quarter 2026 results release, October 22, 2026
- Honeywell Technologies, spin-off completion release, June 29, 2026
- Honeywell Technologies, second quarter 2026 results release, July 23, 2026
- Honeywell Technologies, guidance update after the reverse split, July 8, 2026
- Honeywell Technologies, investor day release, June 11, 2026
- Honeywell, fourth quarter 2025 results release, January 29, 2026
- Honeywell Technologies, quarterly dividend, September 25, 2026
- Honeywell, quarterly dividend, April 27, 2026
- Honeywell Technologies, Johnson Matthey Catalyst Technologies acquisition, July 2026
- Honeywell Technologies, Warehouse and Workflow Solutions sale
- Honeywell Technologies, Productivity Solutions and Services sale, August 3, 2026
- Honeywell Aerospace, second quarter 2026 results release, August 5, 2026
- Honeywell Aerospace, third quarter results date, September 29, 2026
- Honeywell Technologies, Form 8-K filed October 22, 2026, Exhibit 99 (third quarter 2026 release)
- Honeywell International, Form 8-K filed June 29, 2026
- Trademark License Agreement, Exhibit 10.2 to the June 29, 2026 Form 8-K
- Restated segment information, Exhibit 99.2 to the June 29, 2026 Form 8-K
- Honeywell Aerospace, information statement, Form 10 amendment, June 2026
- Honeywell Aerospace, Form 8-K filed August 5, 2026
- Rockwell Automation, fiscal third quarter 2026 results
- Emerson, third quarter 2026 results
- ABB, third quarter 2026 results
The information provided in this article is for educational and informational purposes only. It does not constitute financial advice, investment recommendation, or an endorsement of any particular investment strategy. Past performance does not guarantee future results. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.