Honeywell International Inc. (NASDAQ:HON) posted stronger-than-expected third-quarter earnings on Thursday, prompting the industrial conglomerate to lift its full-year guidance even as it prepares to spin off its specialty chemicals unit, Solstice Advanced Materials, at the end of the month.
Group sales rose 7% year-over-year, driven largely by strength in Honeywell’s aerospace division. Total revenue reached $10.41 billion, topping Wall Street estimates.
Executives told Reuters earlier this month that the aerospace business benefited from robust demand for aviation electronics — a product line less affected by recent shortages of raw materials. Engine component availability, including castings and forgings, remains challenging, though supply constraints have started to ease, according to the report.
Organic sales in aerospace climbed 12% to $4.51 billion, ahead of the $4.32 billion analysts had expected. Honeywell, which supplies avionics and flight control systems to major aircraft manufacturers like Airbus SE and The Boeing Company, said commercial original equipment sales returned to growth during the quarter thanks to higher shipment volumes. Orders also increased at a double-digit pace.
Meanwhile, sales in its industrial automation business rose 1%, defying expectations for a 2.2% decline. The unit helps factories and warehouses automate their operations, making it a key pillar of Honeywell’s broader strategy to diversify beyond aerospace.
The company is currently undergoing a major restructuring under pressure from Elliott Management Corporation, with plans to break into three independently traded entities covering aerospace, automation, and advanced materials.
«As we progressed toward separating into three industry-leading public companies, we drove strong financial results and unlocked new value creation opportunities during the third quarter,» said CEO Vimal Kapur in a statement.
Although the upcoming spinoff of Solstice — scheduled for completion on October 30 — is expected to weigh on full-year results, Honeywell raised its adjusted earnings guidance to a range of $10.60 to $10.70 per share, up $0.10 at the midpoint from its previous forecast. It now sees annual sales of $40.7 billion to $40.9 billion, compared to the prior range of $40.8 billion to $41.3 billion.
Shares of Honeywell climbed more than 4% in U.S. premarket trading following the announcement.