Honeywell Aerospace, soon to trade as HONA after its June 29 spin-off, is prioritizing investments in its capacity and supply chain over dividends or share buybacks, according to CEO Jim Currier. The company projects $6.5 billion in adjusted earnings by 2030, fueled by robust demand from jetmakers and defense customers. This leaner structure is expected to enable faster decision-making, as demonstrated by a recent $500 million investment in precision-guided missiles and munitions production, a deal Currier noted would have been difficult as part of a larger conglomerate.
Despite an impressive 20% increase in its backlog to $19 billion and 11% organic growth last year, Honeywell Aerospace has been grappling with persistent supply chain issues, particularly in the mechanical components sector. Currier described these as "acute, transitory issues" that impacted engines and control systems in early 2026. While the company has consistently increased output for ten straight quarters, the mechanical supply base remains "fragmented" and "non-robust," prompting strategies like dual-sourcing and direct investments in suppliers' tooling. Jefferies analyst Sheila Kahyaoglu has voiced concerns that the spun-off entity might receive less favorable treatment from critical suppliers like those providing castings and forgings.
Looking ahead, Honeywell Aerospace anticipates 6% to 8% annual sales growth through the decade, reaching over $4 billion in free cash flow by 2030. For the current year, it expects 7% to 9% sales growth, $4.6 billion to $4.7 billion in earnings before interest and taxes, and $1 billion to $1.5 billion in free cash flow in the second half. The company is actively monitoring potential bottlenecks across various materials and manufacturing processes, including castings, forgings, and specialty materials. Currier emphasized that capital deployment will extend beyond internal operations to support smaller, critical suppliers, ensuring overall supply chain resilience.
