01—Abstract
Summary
Summary of the 10-Q filed July 23, 2026. Cited figures are marked; the original filing is the authoritative source.
Honeywell International Inc. reported strong performance for the six months ended June 30, 2026, driven by significant net sales growth and a substantial gain on the deconsolidation of its former subsidiary, Quantinuum.
Net sales increased to $18.86 billiona from $18.25 billion in the prior year, reflecting positive contributions from pricing actions, acquisitions, and favorable foreign currency translation, partially offset by lower volumes and divestitures. The company also completed the spin-off of its Aerospace Technologies business, a strategic move to simplify its portfolio and enhance shareholder value. This event, along with other strategic transactions, significantly impacted the company's financial results, including a substantial one-time gain.
The company demonstrated resilience in a challenging macroeconomic environment, characterized by elevated inflation and market volatility, by effectively managing costs and implementing strategic pricing. The deconsolidation of Quantinuum contributed a significant gain to net income, boosting earnings per share.
While operational performance was solid, the company is actively managing its portfolio through divestitures and acquisitions, with the recent acquisition of Johnson Matthey's Catalyst Technologies business poised to strengthen its Process Automation and Technology segment. Investors should note the strategic shifts, including the Aerospace Spin-Off and ongoing portfolio management, as key drivers of current and future financial performance.
02—Key points
Key Highlights
- Net sales for the six months ended June 30, 2026, increased to $18.86 billion from $18.25 billion in the prior year, driven by pricing, acquisitions, and FX, despite some volume declines.
- The company recorded a significant gain of $6.629 billion on the deconsolidation of its former subsidiary, Quantinuum, in the second quarter of 2026.
- Honeywell completed the spin-off of its Aerospace Technologies business on June 29, 2026, with historical results to be reported as discontinued operations from Q3 2026.
- The company acquired Johnson Matthey's Catalyst Technologies business for $1.75 billion on July 17, 2026, to be integrated into the Process Automation and Technology segment.
- Total debt remained substantial at $33.99 billion as of June 30, 2026, though down from $34.58 billion at year-end 2025, reflecting debt management activities including tender offers and redemptions.
- Repositioning and other charges for the six months ended June 30, 2026, totaled $159 million, primarily related to workforce reductions and asset impairments.
- Backlog increased by 12% to $38.0 billion as of June 30, 2026, compared to the prior year, indicating strong future demand across segments.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Honeywell International kept $0.58.
- Revenue$9.72B100.0%
- Cost of revenue−$6.07B62.4%
- Gross profit$3.65B37.6%
- Operating costs−$1.41B14.5%
- Operating income$2.24B23.0%
- Interest, other & tax$3.44B35.4%
- Net income$5.68B58.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 23, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $9.72B$9.32B | +4.3% |
| Cost of Revenue | $6.07B$5.66B | +7.2% |
| Gross Profit | $3.65B$3.66B | −0.3% |
| R&D Expenses | $524.00M$459.00M | +14.2% |
| SG&A Expenses | $1.34B$1.36B | −1.3% |
| Operating Income | $2.24B$2.13B | +5.3% |
| Net Income | $5.68B$1.57B | +261.9% |
| EPS (Basic) | $17.92$4.92 | +264.2% |
| EPS (Diluted) | $17.83$4.90 | +263.9% |
| Shares Outstanding (Basic) | 317.10M318.80M | −0.5% |
| Shares Outstanding (Diluted) | 318.60M320.50M | −0.6% |
05—Questions
Frequently Asked Questions
What were the major financial impacts of the Quantinuum deconsolidation and Aerospace Spin-Off?
The deconsolidation of Quantinuum in the second quarter of 2026 resulted in a significant gain of $6.629 billion. The Aerospace Spin-Off, completed on June 29, 2026, will lead to the Aerospace Technologies business being reported as discontinued operations from the third quarter of 2026 onwards. These events have substantially reshaped the company's financial reporting and structure.
How did the company's debt and liquidity position change during the period?
Total borrowings decreased slightly to $33.99 billion as of June 30, 2026, from $34.58 billion at year-end 2025, reflecting active debt management including tender offers and redemptions. The company maintains strong liquidity, with $8.75 billion in cash and cash equivalents as of June 30, 2026, and believes its operating cash flows are sufficient to meet future operating needs for at least the next twelve months.
What is the outlook for Honeywell's key business segments based on the reported results?
The Aerospace Technologies segment, soon to be reported as discontinued, showed a 5% sales increase in Q2 2026. Building Automation reported a solid 10% sales increase, driven by demand in both Products and Solutions. Process Automation and Technology saw a 4% sales increase, influenced by acquisitions and project volume, despite some decline in aftermarket catalyst shipments. Industrial Automation experienced a 5% sales decrease, largely due to the prior year's divestiture of the PPE business, but showed organic growth in its Solutions business.
What are the main drivers for the increase in net sales and earnings per share?
Net sales increased due to favorable pricing, incremental sales from acquisitions (like Sundyne and Johnson Matthey's Catalyst Technologies business), and positive foreign currency translation effects. Earnings per share were significantly boosted by the large gain on the deconsolidation of Quantinuum, in addition to the operational improvements and sales growth.
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