Key facts
- Honeywell Aerospace lowered its 2026 sales growth forecast to 4%-5% from 7%-9% due to supply chain issues.
- The company's 2026 earnings outlook fell below analyst expectations.
- Supply chain constraints are forcing prioritization of OEM deliveries to Boeing and Airbus over aftermarket business.
- Second-quarter adjusted profit per share fell 32% to $1.87.
- Second-quarter sales increased 5% to $4.52 billion.
- Approximately $100 million in separation-related costs and inventory obsolescence charges were incurred.
Honeywell Aerospace, recently spun off from Honeywell, has revised its 2026 sales growth forecast downward to 4%-5% from a previous estimate of 7%-9%, citing persistent supply-chain challenges. The company also issued a weaker-than-expected earnings outlook, projecting annual adjusted earnings per share between $7.60 and $7.90, falling short of analysts' average estimate of $8.86.
Chief Financial Officer Josh Jepsen stated that robust demand is being constrained by supply issues. The company is prioritizing commercial original equipment manufacturer (OEM) deliveries to planemakers like Boeing and Airbus, which are ramping up production, over its more profitable aftermarket business. This strategic shift is expected to result in a less favorable sales mix for the latter half of the year.
The company incurred approximately $100 million in separation-related costs and inventory obsolescence charges, contributing to a 7% year-on-year decline in quarterly core profit. In the second quarter, adjusted profit per share fell 32% to $1.87, while sales saw a 5% increase to $4.52 billion. Higher costs and the unfavorable business mix pressured profitability despite increased sales volumes and pricing. CEO Jim Currier noted that while secular trends in end-markets remain strong, supply constraints limited output growth.
Commercial aftermarket sales, the company's largest market, grew 8%, and defense and space sales increased by 3%. Honeywell Aerospace debuted on the Nasdaq in June as part of a three-way split of Honeywell.