01—Abstract
Summary
Summary of the 8-K filed January 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Honeywell reported fourth-quarter 2025 sales of $9.76 billiona, up 6% year over year, or up 10% on an adjusted basis ($10.07 billion) and 11% organically.
Orders rose 23% organically, lifting backlog to a record of over $37 billionb. GAAP EPS fell 72% to $0.49, driven by a $288 million goodwill impairment, a $220 million impairment on assets held for sale tied to the Productivity Solutions and Services (PSS) and Warehouse and Workflow Solutions (WWS) businesses, and a $373 million segment-profit charge (a $312 million sales reduction) from the Flexjet litigation settlement. Excluding these items, adjusted EPS rose 17% to $2.59, and full-year adjusted EPS was $9.78, up 12%.
The 2026 outlook calls for sales of $38.8 to $39.8 billionc, 3% to 6% organic growth, adjusted EPS of $10.35 to $10.65 (up 6% to 9%), and free cash flow of $5.3 to $5.6 billion. The guidance excludes the pending Johnson Matthey Catalyst Technologies acquisition. The company also said the separation of Honeywell Aerospace is now expected in the third quarter of 2026, ahead of prior expectations.
The filing furnishes recast segment data for a new reporting structure effective Q1 2026. Energy and Sustainability Solutions will be eliminated as a reportable segment. Its UOP business will move into a new Process Automation and Technology segment, alongside the core Process Solutions business.
Industrial Automation will be reconstituted, and the company will report four segments: Aerospace Technologies, Building Automation, Process Automation and Technology, and Industrial Automation. The recast data is unaudited and does not restate prior financial statements.
02—Key points
Key Highlights
- Q4 2025 sales were $9.76 billion, up 6% reported and 11% organic. Adjusted sales of $10.07 billion excluded a $312 million Flexjet-related contra-revenue charge.
- GAAP EPS fell 72% to $0.49 on a $288 million goodwill impairment, $220 million in held-for-sale impairments (PSS and WWS), and the Flexjet settlement. Adjusted EPS rose 17% to $2.59.
- Q4 orders grew 23% organically, driving backlog up 4% sequentially to over $37 billion. Aerospace Technologies orders and backlog both grew at a strong double-digit rate.
- 2026 guidance: sales of $38.8 to $39.8 billion, 3% to 6% organic growth, adjusted EPS of $10.35 to $10.65, and free cash flow of $5.3 to $5.6 billion. Guidance excludes the pending Johnson Matthey Catalyst Technologies acquisition.
- Honeywell Aerospace spin-off now expected in Q3 2026, ahead of prior expectations. Jim Currier was named CEO of Honeywell Aerospace and Josh Jepsen its CFO.
- Segment realignment effective Q1 2026: Energy and Sustainability Solutions is eliminated, UOP moves into a new Process Automation and Technology segment, and the historical recast is provided in Exhibit 99.2 without restating prior financials.
- Full-year 2025 free cash flow was $5.1 billion, up 20% (7% excluding the Bombardier agreement impact), and operating cash flow from continuing operations was $6.1 billion, up 19%.
03—Questions
Frequently Asked Questions
Why did GAAP EPS fall so sharply in Q4 2025 while adjusted EPS grew?
GAAP EPS of $0.49 (down 72%) reflected a $288 million goodwill impairment, $220 million in impairments on assets held for sale for PSS and WWS, and the Flexjet litigation settlement, which reduced segment profit by $373 million and sales by $312 million. Adjusted EPS of $2.59 (up 17%) excludes these items, along with other adjustments such as amortization and pension mark-to-market expense.
What does the new segment structure mean for investors comparing periods?
Starting Q1 2026, Honeywell will report four segments: Aerospace Technologies, Building Automation, Process Automation and Technology, and Industrial Automation. Energy and Sustainability Solutions will no longer be reported. Exhibit 99.2 provides recast 2025 data on the new basis, which is unaudited and does not restate prior financial statements, so investors can compare the new segments against 2025 figures.
What is the outlook for 2026 and what assumptions matter most?
Guidance calls for sales of $38.8 to $39.8 billion, 3% to 6% organic growth, segment margin of 22.7% to 23.1% (expansion of 20 to 60 basis points), adjusted EPS of $10.35 to $10.65, and free cash flow of $5.3 to $5.6 billion. The outlook includes full-year Aerospace, PSS, and WWS results but excludes the pending Johnson Matthey Catalyst Technologies acquisition, so any closing would change the picture.
What is the status of the Aerospace spin-off and the divestitures of PSS and WWS?
The company now expects the separation of Honeywell Aerospace in Q3 2026, earlier than previously planned, and has named its leadership team. PSS and WWS are classified as held for sale following a strategic review, and the company has recorded impairments tied to that classification. The filing describes the planned sale as a way to focus on core automation businesses, though the timing and terms of those sales are not specified in this release.
How did the Flexjet settlement affect Honeywell's results and outlook?
Honeywell and Flexjet agreed to resolve all pending litigation, including related claims involving StandardAero and Duncan Aviation. The settlement reduced Q4 2025 sales by $312 million and segment profit by $373 million, and it is excluded from adjusted metrics. A cash payment for the settlement is included in the 2026 free cash flow reconciliation, and Flexjet agreed to extend aircraft engine maintenance through 2035 as partial consideration.
04—Continue