Honeywell International (NASDAQ:HON) shares fell 1.5% after the industrial and technology group released annual earnings guidance that failed to meet Wall Street forecasts, despite reaffirming its revenue and cash flow targets.
Investors focused on the company’s profit outlook, which came in below consensus estimates as Honeywell continues preparations for the separation of its aerospace division later this month.
Earnings forecast misses analyst expectations
Honeywell projected adjusted earnings per share for 2025 in a range of $10.35 to $10.65.
The midpoint of that forecast fell below analysts’ consensus estimate of $10.52, prompting a negative reaction from the market.
Despite the softer earnings outlook, the company left its organic sales growth forecast unchanged at 3% to 6%, compared with market expectations of approximately 4.6%.
Honeywell also maintained its revenue guidance of between $38.8 billion and $39.8 billion for the year, broadly in line with analyst expectations of $39.39 billion.
Cash flow outlook remains strong
The company reaffirmed its free cash flow forecast of $5.3 billion to $5.6 billion, which remains ahead of the consensus estimate of $5.23 billion.
The unchanged cash generation outlook provided some support to investors, highlighting the resilience of Honeywell’s underlying operations despite concerns surrounding earnings growth.
Honeywell Technologies issues first standalone framework
Alongside its annual update, Honeywell unveiled preliminary financial targets for Honeywell Technologies, the business that will remain after the planned spin-off of Honeywell Aerospace on June 29.
For 2026, Honeywell Technologies expects revenue of between $19.9 billion and $20.2 billion, supported by organic sales growth of 2% to 3%.
The company forecasts adjusted earnings per share of $3.95 to $4.15, representing projected growth of between 22% and 28%.
Focus shifts to aerospace separation
Honeywell Technologies also expects operating cash flow of $4.7 billion to $5.0 billion in 2026.
Free cash flow is projected to remain between $5.3 billion and $5.6 billion, representing growth of 4% to 10% compared with prior levels.
The guidance update comes as Honeywell enters the final stages of its planned aerospace spin-off, a transaction designed to create a more focused industrial technology company while allowing the aerospace business to operate independently.
With the separation scheduled to be completed at the end of June, investors are likely to remain focused on the future growth profile and earnings potential of both businesses as standalone entities.