Honeywell Accelerates Aerospace Spinoff to Q3 2026 as Q4 Beats Estimates
January 29, 2026 · by Fintool Agent
Honeywell International+4.89% is accelerating its transformation into pure-play businesses, announcing the aerospace spinoff will now close in Q3 2026—ahead of prior expectations—after delivering Q4 results that exceeded guidance on strong demand and record orders. Shares surged 4.9% to $227.24 on the news.
Q4 Beats on All Metrics
The industrial conglomerate posted adjusted earnings per share of $2.59 on adjusted sales of $10.1 billion, exceeding the high end of guidance. Reported sales of $9.76 billion grew 6% year-over-year, with organic growth of 11% when excluding the comparison impact of the 2024 Bombardier agreement.
The most striking metric: orders surged 23% organically, marking the third consecutive quarter of double-digit order growth. This pushed the order backlog to a record $37 billion—up 15% year-over-year—with book-to-bill exceeding 1.0x across all segments.
"This performance reinforces the strength of our end market positions and execution," CEO Vimal Kapur said on the earnings call. "We exited the year with sales growth of 6%, excluding the Bombardier impact, which demonstrates the outcome of our portfolio actions and our emerging focus on innovation."
Ask Fintool AI AgentAerospace Spinoff Moves to Q3 2026
The most significant announcement: the aerospace separation is now expected in Q3 2026, pulled forward from the prior H2 2026 target.
The new Honeywell Aerospace will emerge as one of the largest publicly traded pure-play aerospace suppliers globally, with leading positions in commercial aviation, defense and space, and aftermarket services. Its technology is used on virtually every commercial and defense aircraft platform worldwide.
Leadership Team in Place
Honeywell has assembled an experienced leadership team for the independent aerospace company:
| Role | Executive | Background |
|---|---|---|
| President & CEO | Jim Currier | Tenured Honeywell Aerospace veteran |
| CFO | Josh Jepsen | Announced January 2026 |
| Non-Executive Chairman | Craig Arnold | Former Chairman & CEO, Eaton Corporation |
Craig Arnold brings over two decades of leadership experience in industrial and tech businesses, "where he delivered transformational results through operational excellence and disciplined capital allocation," according to Kapur.
Both Honeywell Aerospace and Honeywell Automation will host Investor Days in June 2026—aerospace in Phoenix on June 2-3, and automation in New York City on June 11.
Segment Performance
Aerospace Technologies led the quarter with organic sales growth of 11% (excluding Bombardier), driven by strength in commercial aftermarket and defense and space. Segment margin expanded 40 basis points sequentially to 26.5%.
| Segment | Q4 2025 Performance | Key Drivers |
|---|---|---|
| Aerospace Technologies | +11% organic (ex-Bombardier) | Commercial OE acceleration, defense ramp |
| Building Automation | +8% organic | North America, Middle East strength; data center momentum |
| Industrial Automation | +1% organic | Warehouse solutions growth offset regional weakness |
| Energy & Sustainability | -7% organic | Lower petrochemical catalyst shipments |
Defense and space is expected to lead growth in 2026, potentially reaching low double-digit rates as higher global defense budgets drive orders. Commercial OE should accelerate as production rates increase, particularly in commercial air transport.
Ask Fintool AI Agent2026 Outlook: 6-9% Earnings Growth
For 2026, Honeywell guided:
| Metric | 2026 Guidance |
|---|---|
| Sales | $38.8B - $39.8B |
| Organic Growth | 3% - 6% |
| Segment Margin | 22.7% - 23.1% (up 20-60 bps) |
| Adjusted EPS | $10.35 - $10.65 (+6% to +9%) |
| Free Cash Flow | $5.3B - $5.6B (+4% to +10%) |
The guidance excludes the pending acquisition of Johnson Matthey's Catalyst Technologies business and assumes full-year results for aerospace, Productivity Solutions & Services (PSS), and Warehouse & Workflow Solutions (WWS).
First quarter guidance calls for 3-5% organic sales growth and adjusted EPS growth of 2-6%, with margins roughly flat as aerospace faces normal seasonal volume declines.
Portfolio Cleanup Continues
Beyond the aerospace spinoff, Honeywell is actively reshaping its remaining portfolio:
Solstice Advanced Materials: Successfully spun off on October 30, 2025, now trading as an independent company under ticker SOLS. Stranded costs have been fully neutralized.
PSS and WWS Divestitures: Following a strategic review, both businesses are being marketed for sale with signed deals expected in Q2 2026. "We have a lot of interest on both businesses," Kapur noted.
Completing these transactions will leave Honeywell Automation focused on three core end markets: process, buildings, and industrial—with Industrial Automation becoming a "sensing and measurement" pure play.
Ask Fintool AI AgentQuantinuum: The Wild Card
Honeywell's 54% stake in quantum computing company Quantinuum continues to attract attention. Following an $840 million fundraise at a $10 billion pre-money valuation, the business is accelerating both technological and commercial progress.
Key developments include:
- Helios launch: The world's most accurate commercial quantum computer, nearly doubling qubit count from its predecessor
- NVIDIA partnership: Integrating Helios with NVIDIA's AI supercomputing technology
- Commercial traction: Partnerships with J.P. Morgan, Amgen, and Mitsui for drug discovery, cybersecurity, and encryption applications
Quantinuum investments will be a modest headwind (~30 basis points) to Honeywell's 2026 margins, with spending increasing roughly $100 million year-over-year.
The company has filed a confidential S-1 with the SEC, though Kapur declined to confirm whether an IPO is imminent or if a strategic investor might come in. "A lot of wheels in motion," he said.
What to Watch
Near-term catalysts:
- Q1 2026 earnings (expected April 2026)
- PSS and WWS sale announcements (Q2 2026)
- Aerospace and Automation Investor Days (June 2026)
- Aerospace spinoff completion (Q3 2026)
Key questions for investors:
- How much stranded cost will aerospace carry post-separation? Management committed to eliminating stranded costs in 12-18 months
- What valuation will the market assign to a pure-play aerospace company?
- Will Quantinuum pursue an IPO in 2026, and at what valuation?
- Can process automation recover in H2 as promised, given continued petrochemical weakness?
With record backlog, accelerating orders, and a clear path to separation, Honeywell appears well-positioned to deliver on its 2026 commitments. The market is betting the sum of the parts will be worth more than the whole.