Honeywell Aerospace (NASDAQ:HONAV) shares fell nearly 12% in premarket trading on Thursday after the aerospace manufacturer reduced its 2026 sales growth forecast and issued a full-year earnings outlook that came in well below Wall Street expectations.
The aircraft engine, aerospace components and defence systems producer now expects organic sales growth of between 4% and 5% this year, compared with its previous guidance of 7% to 9%.
Management also forecast adjusted earnings per share of between $7.60 and $7.90 for 2026, significantly below the analyst consensus of $8.86 compiled by LSEG.
Supply-chain constraints weigh on outlook
The company said ongoing supply-chain challenges continue to restrict its ability to meet robust demand in the aftermarket business, prompting the downgrade to its financial outlook.
Analysts at Wolfe Research warned that investors in the aerospace sector typically expect companies to outperform forecasts and raise guidance, rather than cut expectations.
In a post-results note, the brokerage said, “Aerospace stocks work on the back of beats and raises not misses and cuts and so HONA is likely in for a bumpy ride until results can show a real inflection. There are things to like in the story (& not just stock’s cheap valuation) but right now risk skews negative.”
Separation costs pressure quarterly earnings
Honeywell Aerospace began trading independently on the Nasdaq in June after being spun off from Honeywell International as part of the breakup of the long-standing industrial conglomerate into three separate businesses.
During the second quarter, the company incurred approximately $100 million in costs related to the separation and inventory obsolescence, contributing to a 7% year-over-year decline in core profit.
Adjusted earnings per share fell 32% to $1.87, while quarterly revenue increased 5% to $4.52 billion.