Honeywell Sets Aerospace Spin-Off for June 29
The industrial conglomerate reaffirmed full-year guidance while lowering its operating cash flow target to $4.4 billion–$4.7 billion.
Honeywell International (HON) finalized plans to spin off its aerospace business, marking the quarter’s defining corporate action as the industrial conglomerate reported accelerating organic growth and margin expansion. The company’s Board of Directors approved the distribution of Honeywell Aerospace on June 29, 2026, contingent on a 1-for-2 reverse stock split of Honeywell Technologies common stock. Shares of the new entity, Honeywell Aerospace, will begin trading on Nasdaq under the ticker 'HONA' the same day, with 'when-issued' trading under 'HONAV' starting June 15.
The spin-off, first announced in 2025, represents Honeywell’s largest strategic shift in over a decade. Honeywell Technologies will retain the 'HON' ticker but will trade in an 'ex-distribution' market under 'HONIV' from June 15 to June 26 for shares without rights to the aerospace unit. The aerospace segment filed its Form 10 registration in late 2025, disclosing pro forma 2025 net sales of $17.4 billion and adjusted EBIT of $4.3 billion, including $202 million in incremental standalone costs.
First-quarter sales reached $9.1 billion, up 2% year-over-year on an organic basis, accelerating from flat growth in prior quarters. Orders grew 7%, pushing backlog to $38.3 billion, a 2% sequential increase. Segment margin expanded 90 basis points to 23.3%, driven by pricing and stranded cost removal, though operating margin contracted 320 basis points to 16.1% due to impairment charges and separation costs.
Aerospace Technologies led growth with 3% organic sales expansion and a 6% rise in orders, while segment margin improved 20 basis points to 26.5%. Building Automation sales grew 8% organically, though this marked a deceleration from prior quarters, while Process Automation and Technology sales declined 6% due to Middle East conflict delays. Industrial Automation sales rose 1% but saw segment margin expand 260 basis points to 17.0% on productivity gains.
Honeywell reaffirmed its full-year 2026 guidance, projecting sales of $38.8 billion–$39.8 billion (3–6% organic growth) and adjusted earnings of $10.35–$10.65 a share (6–9% growth). However, the company lowered its operating cash flow target to $4.4 billion–$4.7 billion from $4.7 billion–$5.0 billion. Separately, Honeywell agreed to sell its Warehouse and Workflow Solutions business, which generated $935 million in 2025 revenue, with the transaction expected to close in the second half of 2026.
The company also disclosed a $312 million impact to 2025 sales from Flexjet-related litigation, a one-time item not previously reported. To finance the spin-off, Honeywell launched a $16 billion senior notes offering for Honeywell Aerospace and initiated cash tender offers to repurchase up to $3.75 billion in dollar-denominated securities and €1.25 billion in euro-denominated securities.