HON · Earnings call · 2026Q3T · Full report

Operating Income and Margins

HONEYWELL INTERNATIONAL INC · 2026-10-22 · Importance 47 · Surprise 48 · No source text

Third-quarter segment profit increased 23%, and segment margin expanded 370 basis points to 21.3%. Productivity, accelerated stranded-cost elimination, strategic pricing and volume leverage more than offset inflation, project-versus-aftermarket mix headwinds, and the P&T acquisition impact. IA margin expanded 350 basis points on price and productivity, while BA margin increased 30 basis points to 27%; P&T margin contracted because of higher project mix and dilution from the Catalyst Technologies acquisition. Management projected full-year margin of 20.5% and fourth-quarter margin of approximately 22%.

Key facts

• Honeywell expects full-year 2026 margin of 20.5% and Q4 margin of approximately 22%.
• Honeywell expects Q4 2026 Industrial Automation margin of 22%, Building Automation margin expansion of 70-90 basis points, and P&T margin around 21.5%.
• Honeywell is targeting productivity and margin expansion north of 60 basis points in 2027.
• Honeywell expects Industrial Automation to finish 2026 at 22% margin and remains confident of reaching its 25% margin goal by 2029.
• Honeywell expects P&T margin around 21.5% in Q4 2026 and a similar level in the first half of 2027, with expansion into the second half of 2027 and a significant pickup in 2028.
• Honeywell expects full-year 2026 margin of 20.5%, about 300 basis points of margin expansion for the year.
• Q3 2026 segment profit grew 23%, and segment margin expanded 370 basis points to 21.3%.
• Honeywell expects strong P&T margin expansion in the second half of 2027 and a significant further margin pickup in 2028.

Impact estimates