Honeywell’s first quarter reflected a mix of solid order growth and operational challenges, with the company missing Wall Street’s revenue expectations but delivering a higher-than-expected non-GAAP profit. Management attributed the quarter’s performance to double-digit order increases in Building and Industrial Automation, as well as ongoing demand in Aerospace, despite temporary supply chain constraints. CEO Vimal Kapur described the supply chain issues as “acute and transitory,” particularly in the mechanical segment of Aerospace, but noted that recovery was underway by March.
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Honeywell (HON) Q1 CY2026 Highlights:
- Revenue: $9.14 billion vs analyst estimates of $9.28 billion (2.4% year-on-year growth, 1.4% miss)
- Adjusted EPS: $2.45 vs analyst estimates of $2.32 (5.6% beat)
- Adjusted EBITDA: $2.34 billion vs analyst estimates of $2.30 billion (25.5% margin, 1.5% beat)
- The company reconfirmed its revenue guidance for the full year of $39.3 billion at the midpoint
- Management reiterated its full-year Adjusted EPS guidance of $10.50 at the midpoint
- Operating Margin: 13.6%, down from 21.5% in the same quarter last year
- Organic Revenue rose 2% year on year (miss)
- Market Capitalization: $133.3 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Honeywell’s Q1 Earnings Call
- Nigel Coe (Wolfe Research) pressed for details on the specific supply chain issues in Aerospace; Aerospace CEO Jim Currier explained these were acute, supplier-driven mechanical shortages, with recovery beginning in March.
- Julian Mitchell (Barclays) asked about the Process Automation organic sales ramp; CEO Vimal Kapur cited strong backlog and order momentum supporting a second-half rebound, despite current disruptions.
- Sheila Kahyaoglu (Jefferies) queried the impact of Middle East disruptions on commercial aftermarket exposure; Currier clarified that demand remained robust and Honeywell's growth was supply-constrained, not demand-constrained.
- Andrew Obin (Bank of America) inquired about Building Automation’s competitive environment; Kapur described the market as fragmented, with Honeywell’s growth driven by new products and expansion into new regions and verticals.
- Christopher Snyder (Morgan Stanley) asked if Aerospace supply chain issues reflected customer de-stocking; Currier emphasized the problem was solely with supplier output, not customer demand or inventory reductions.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will closely watch (1) resolution of Aerospace supply chain constraints and their effect on production rates, (2) conversion of Process Automation’s robust backlog, particularly in LNG and petrochemical projects, and (3) execution on portfolio restructuring, including closing announced divestitures and the Aerospace spin-off. Progress in these areas will signal Honeywell’s ability to sustain margin improvement and growth.
Honeywell currently trades at $209.58, down from $219.97 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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