01—Abstract
Summary
Summary of the 10-Q filed April 23, 2026. Cited figures are marked; the original filing is the authoritative source.
Honeywell International Inc. reported net sales of $9,143 milliona for the first quarter of 2026, a 2% increase from the prior year's quarter, driven by pricing actions and favorable foreign currency translation, partially offset by lower sales volumes and the impact of divestitures.
Net income attributable to Honeywell was $821 millionb, or $1.29 per diluted share, a significant decrease from $1,449 million, or $2.22 per diluted share, in the same period last year. This decline was primarily due to a $239 million loss on debt extinguishment, a $263 million impairment of assets held for sale, and higher divestiture-related costs. The company is actively managing its portfolio, with plans to separate its Aerospace Technologies business by June 29, 2026, and has reached agreements to sell its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses.
The acquisition of Johnson Matthey's Catalyst Technologies business is expected to close in the third quarter of 2026. Despite near-term headwinds from debt extinguishment and impairments, Honeywell's backlog increased by 15% to $38.3 billionc, indicating strong future demand across its segments, particularly in Aerospace Technologies. The company continues to focus on operational cash flow generation as a primary source of liquidity.
02—Key points
Key Highlights
- Net sales increased by 2% to $9.14 billion in Q1 2026 compared to Q1 2025, driven by pricing and favorable foreign exchange, though volume decreased.
- Net income attributable to Honeywell decreased significantly to $821 million ($1.29/share) from $1,449 million ($2.22/share) in the prior year quarter, impacted by substantial non-recurring charges.
- A loss of $239 million on debt extinguishment and a $263 million impairment of assets held for sale were key drivers of the net income decline.
- Honeywell is progressing with its strategic portfolio transformation, including the planned spin-off of its Aerospace Technologies business and agreements to sell its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses.
- The company's backlog of orders increased by 15% to $38.3 billion, signaling robust future demand, particularly in the Aerospace Technologies segment.
- Segment profit showed mixed performance, with Aerospace Technologies up 4%, Building Automation up 13%, Process Automation and Technology up 15%, and Industrial Automation up 5%, despite some revenue challenges in the latter.
- Net cash used for operating activities from continuing operations was negative $650 million, a decrease from positive $378 million in the prior year, impacted by working capital changes and a large litigation settlement payment.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Honeywell International kept $0.09.
- Revenue$9.14B100.0%
- Cost of revenue−$5.60B61.3%
- Gross profit$3.54B38.7%
- Operating costs−$1.41B15.4%
- Operating income$2.13B23.3%
- Interest, other & tax−$1.31B14.3%
- Net income$821.0M9.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed April 23, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $9.14B$8.93B | +2.4% |
| Cost of Revenue | $5.60B$5.46B | +2.6% |
| Gross Profit | $3.54B$3.46B | +2.2% |
| R&D Expenses | $492.00M$416.00M | +18.3% |
| SG&A Expenses | $1.31B$1.31B | 0.0% |
| Operating Income | $2.13B$2.00B | +6.3% |
| Net Income | $821.00M$1.45B | −43.3% |
| EPS (Basic) | $1.29$2.24 | −42.4% |
| EPS (Diluted) | $1.29$2.22 | −41.9% |
| Shares Outstanding (Basic) | 634.70M648.20M | −2.1% |
| Shares Outstanding (Diluted) | 638.40M651.70M | −2.0% |
05—Questions
Frequently Asked Questions
What caused the significant drop in net income compared to the previous year?
The significant decrease in net income was primarily due to non-recurring charges. This includes a substantial $239 million loss on debt extinguishment related to tender offers and redemptions, a $263 million impairment of assets held for sale for the Productivity Solutions and Services and Warehouse and Workflow Solutions businesses, and higher divestiture-related costs associated with the anticipated spin-off of the Aerospace business. These items significantly impacted the profitability for the quarter.
How is Honeywell positioning its business portfolio for the future?
Honeywell is actively transforming its portfolio. Key initiatives include the planned separation of its Aerospace Technologies business, expected by June 29, 2026, and agreements to sell its Productivity Solutions and Services and Warehouse and Workflow Solutions businesses in the second half of 2026. The company is also expecting to complete the acquisition of Johnson Matthey's Catalyst Technologies business in the third quarter of 2026.
What is the outlook for demand based on the company's backlog?
Honeywell's backlog of orders increased by 15% to $38.3 billion as of March 31, 2026, compared to the prior year. This significant growth indicates strong future demand across its business segments, with the Aerospace Technologies segment showing particular strength, holding $18.8 billion of the total backlog.
What are the key financial impacts of the planned Aerospace Technologies spin-off?
The spin-off of the Aerospace Technologies business has led to significant financing activities. In March 2026, the company engaged in substantial pre-separation funding, including issuing $16.0 billion in senior notes by Honeywell Aerospace and entering into credit agreements to support the separation. This also resulted in increased interest expenses and a loss on debt extinguishment associated with restructuring activities.
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