Honeywell Technologies Raises 2026 Outlook After Organic Growth

The Tip Desk · October 22, 2026 · 3 min read

Organic sales growth accelerated to 7% in the third quarter, and the company lifted full-year organic growth to 4%–5% and adjusted EPS to $8.40–$8.45.

Honeywell Technologies (HON), a pure-play automation company, reported third-quarter sales of $4.99 billion, up 1% as reported and 7% organically, and raised its full-year 2026 outlook for organic revenue, adjusted earnings and free cash flow.

Organic growth accelerated from 4% in the second quarter, when sales were $5.19 billion and up 3% as reported. Chairman and Chief Executive Officer Vimal Kapur said the 7% organic increase was above the three-year target set at the company’s June Investor Day.

The company attributed the quarter to broad-based strength across all three segments, pricing actions, and continued demand across key end markets. Backlog increased 7% year over year to nearly $19 billion, excluding Warehouse and Workflow Solutions and Productivity Solutions and Services divestitures completed in the third quarter.

Operating income was $740 million, up 79%, and operating margin was 14.8%, up 640 basis points. Segment profit was $1.06 billion, up 23%, and segment margin was 21.3%, up 370 basis points. The company said the profit increase was driven by productivity, including elimination of stranded costs related to prior spin-offs and divestitures, pricing that more than offset inflation, and volume leverage.

Adjusted earnings per share were $2.27, up 34%. Reported earnings were $2.40 a share, down 20%, primarily because of a one-time gain from the Resideo termination agreement in the year-ago quarter. The company said adjusted earnings rose on organic sales growth, higher segment profit, and lower net interest expense.

Building Automation, the largest reportable segment, posted sales of $2.02 billion, up 8% both as reported and organically. Segment profit was $546 million, and segment margin was 27.0%, up 30 basis points. Building products grew 11%, fueled by fire and security businesses, while building solutions grew 4% on continued strength in services. The company said the margin expansion benefited from volume leverage and pricing that offset inflation.

Process Automation and Technology sales were $1.86 billion, up 16% as reported and 8% organically. Project sales grew 14%, led by LNG and petrochemical projects, while aftermarket grew 4%, driven primarily by refining demand. Segment profit was $412 million. Segment margin was 22.2%, down 210 basis points; the company said the contraction was expected and driven by project mix and dilution from the acquisition of Johnson Matthey’s Catalyst Technologies business.

Industrial Automation sales were $1.12 billion, down 23% as reported and up 4% organically. Solutions grew 16%, driven primarily by industrial measurement and utilities. Products were flat, with double-digit growth in sensing largely offset by industry-wide meter deployment deferrals in utilities. Segment profit was $205 million. Segment margin was 18.4%, up 350 basis points, which the company said was driven primarily by price and productivity actions, partially offset by inflation.

Operating cash flow from continuing operations was $607 million, down 74%, primarily because of the one-time Resideo settlement in the year-ago period. Free cash flow was $688 million, up 15%, with conversion of 95%, which the company said was driven by higher operating income and lower capital expenditures.

The company now expects full-year sales of $20.0 billion to $20.1 billion, organic growth of 4% to 5%, and 5% to 6% organic growth in the fourth quarter. Segment margin is now expected at approximately 20.5%, the upper end of its previous range, representing expansion of about 290 basis points. Adjusted earnings are now expected at $8.40 to $8.45 a share, up 30% to 31%, a $0.23 increase from the midpoint of the previous range. Operating cash flow and free cash flow are each now expected at about $2.1 billion.