Honeywell Stock Jumps on Earnings. Now Comes the Breakup.

Honeywell reported better-than-expected third-quarter earnings. (Justin Sullivan/Getty Images)

Key Points

• Honeywell reports third-quarter earnings per share of $2.82 on sales of $10.4 billion, exceeding analysts’ expectations.
• Sales and earnings increase by 7% and 9% respectively from the third quarter of 2024.
• Honeywell raises its full-year earnings per share guidance to between $10.60 and $10.70.

Industrial conglomerate Honeywell reported better-than-expected third-quarter earnings on Thursday. Results looked solid ahead of the company’s planned breakup, sending the stock higher.

Shares closed up 6.8% at $220.67, while the S&P 500 and Dow Jones Industrial Average added 0.6% and 0.3%, respectively.

Honeywell posted quarterly earnings per share of $2.82 from sales of $10.4 billion. Wall Street was looking for $2.57 and $10.1 billion, according to FactSet.

A year ago, in the third quarter of 2024, Honeywell reported earnings per share of $2.58 from sales of $9.7 billion. Sales and earnings grew 7% and 9%, respectively.

For the full year, Honeywell expects earnings of between $10.60 and $10.70 a share. The prior range was $10.45 to $10.65. The guidance bump was actually 21 cents higher after adjusting for the coming spinout of Honeywell’s advanced materials business.

The guidance implies fourth-quarter earnings of about $2.60 a share. Wall Street currently projects about $2.70. That can be a concern for investors, but Honeywell has beaten quarterly earnings by an average of about 20 cents per quarter in the first three quarters of 2025. What’s more, most analysts’ estimates likely haven’t accounted for the spin. The $2.60 implied guidance is more comparable to $2.80 when looking at current estimates.

“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 news release. “Increased orders across our business segments pushed the company’s total backlog to another record high and reinforced the benefit of the new, innovative solutions we are delivering for customers.”

Total orders grew 22% year over year.

Following the separation of the materials business, Solstice, the company will split into two companies: one serving the aerospace market and the other serving the automation market. That spin should be completed by the end of 2026.

Aerospace sales grew 12% year over year in the third quarter, led by commercial aftermarket sales, which rose 19%. Profit margins, however, declined to 26.1% from 27.7%, with inflation outweighing cost cutting.

Building Automation sales grew 8% year over year. Margins improved to 26.7% from 25.9%, boosted by higher volumes over Honeywell’s fixed cost base.

Industrial Automation sales rose 1% on a comparable basis year over year. Margins fell to 18.8% from 20.3%, as inflation again outweighed cost-cutting in that segment too.

Overall, it was another solid report. That doesn’t guarantee a positive stock reaction. Honeywell stock declined 6.2% after reporting second-quarter numbers. It rose 5.4% after reporting first-quarter earnings.

Coming into Thursday, Honeywell’s stock has fallen about 9% this year.

Shares trade for about 18.4 times estimated next year’s earnings, down from about 20 times a year ago.

Write to Al Root at allen.root@dowjones.com