HON · 10-Q/A · 2026Q2 · Full report

Operating Income and Margins

HONEYWELL INTERNATIONAL INC · 2026-07-24 · Importance 31 · Surprise 32 · From source text

Consolidated gross margin percentage fell 170 basis points to 37.6% in Q2 2026 and 100 basis points to 38.1% year to date, despite a roughly $100 million year-to-date increase in gross margin dollars. Aerospace Technologies segment profit increased $28 million in Q2 and $73 million year to date, but its margins declined to 24.8% and 25.6%, respectively. Building Automation segment margin expanded 90 basis points to 27.1% in Q2 and 60 basis points to 26.7% year to date as higher demand lifted profit by $63 million and $119 million. Process Automation and Technology margin declined 180 basis points to 22.1% in Q2, while Industrial Automation margin increased 90 basis points to 17.2% despite lower revenue.

Key facts

• Other income decreased in Q2 2026 due to higher divestiture-related costs related to the Aerospace Spin-Off of approximately $0.7 billion, partially offset by higher pension income of approximately $0.1 billion; year-to-date decrease was driven by approximately $0.9 billion of divestiture-related costs partially offset by approximately $0.1 billion of higher pension income. source
• Cost of products and services sold increased year-to-date due to higher direct and indirect material costs and higher labor costs of approximately $0.4 billion or 4%, and incremental costs from recent acquisitions of approximately $0.2 billion or 2%. source
• For the six months ended June 30, 2026 gross margin increased by approximately $0.1 billion and gross margin percentage decreased 100 basis points to 38.1% compared to 39.1% for the same period of 2025. source
• Inventory obsolescence charges in Aerospace Technologies increased by approximately $60 million year-to-date 2026, partially attributable to higher inventory balances. source
• Gross margin percentage for Q2 2026 decreased 170 basis points to 37.6% compared to 39.3% in Q2 2025. source
• Other income included higher pension income of approximately $0.1 billion which partially offset higher divestiture-related costs. source

Impact estimates