01—Abstract
Summary
Summary of the 10-Q/A filed July 24, 2026. Cited figures are marked; the original filing is the authoritative source.
Honeywell International Inc. reported solid operational performance and significant portfolio adjustments for the second quarter and first half of 2026, despite a challenging macroeconomic and geopolitical landscape.
The company demonstrated resilience by effectively managing supply chain volatility and inflationary pressures through disciplined engagement and proactive mitigation strategies. Key strategic moves include the completed spin-off of the Aerospace business and the pending divestiture of Productivity Solutions and Services and Warehouse and Workflow Solutions, which are expected to simplify Honeywell's portfolio and enhance shareholder value. The acquisition of Johnson Matthey's Catalyst Technologies business in July 2026 further strengthens the company's strategic positioning.
02—Key points
Key Highlights
- The company successfully completed the spin-off of its Aerospace business on June 29, 2026, marking a significant portfolio transformation.
- Agreements were reached to sell Productivity Solutions and Services and Warehouse and Workflow Solutions, expected to close in Q3 2026, further simplifying the business portfolio.
- Acquisition of Johnson Matthey's Catalyst Technologies business for $1,750 million in July 2026, bolstering strategic capabilities.
- Net sales increased by 4% for Q2 2026 and 3% year-to-date, driven by pricing actions and incremental sales from acquisitions, partially offset by divestitures.
- Gross margin percentage decreased slightly year-over-year (170 basis points in Q2, 100 basis points YTD) due to increased material and labor costs, though pricing actions helped offset some of this impact.
- The company maintained a robust backlog of $38.0 billion as of June 30, 2026, a 12% increase year-over-year, indicating strong future demand.
- Net cash provided by operating activities from continuing operations decreased significantly due to higher divestiture-related costs and payments related to the Flexjet litigation.
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-Q/AQ2 FY2026filed July 24, 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 major strategic changes has Honeywell made regarding its business segments?
Honeywell has undertaken significant portfolio transformation. The most notable event was the spin-off of its Aerospace business on June 29, 2026. Additionally, agreements have been made to sell the Productivity Solutions and Services and Warehouse and Workflow Solutions businesses, expected to close in the third quarter of 2026. In July 2026, the company acquired Johnson Matthey's Catalyst Technologies business.
How did the company's sales perform in the reported period?
Honeywell reported a 4% increase in net sales for the second quarter of 2026 compared to the prior year, and a 3% increase for the year-to-date period. These increases were primarily driven by pricing actions to offset inflation and incremental sales from acquisitions, although tempered by lower sales from divestitures.
What is the company's outlook on macroeconomic conditions and supply chain?
Honeywell continues to operate in a challenging macroeconomic and geopolitical environment marked by elevated inflation and market volatility. The company is actively managing these risks through disciplined supplier engagement, portfolio simplification, and other mitigation strategies. While these efforts have been effective to date, continued volatility could materially impact future results.
How has the company's profitability been affected by cost pressures?
While net sales have shown growth, the gross margin percentage has seen a slight decrease year-over-year. This is attributed to higher direct and indirect material costs and increased labor costs. The company's pricing actions have helped to partially offset these rising costs, but the margin compression indicates ongoing cost pressures.
06—Continue