Honeywell Aerospace experienced "acute" and "transitory" supply chain problems with key mechanical suppliers in January and February 2026, affecting its engine and control systems businesses. This issue impacted new equipment sales, aftermarket services, and defense segments, leading to lower output and sales growth for its Aerospace Technologies division.
Despite these challenges, Honeywell Aerospace reported a $1.1 billion first-quarter profit, a 4% increase year-on-year, on revenues of $4.3 billion, also up 4%. However, the broader company's Q1 sales of $9.14 billion fell below analyst estimates of $9.31 billion, partly due to the Middle East conflict which is also expected to cause a 1% reduction in Q2 revenue for its automation and technology segment. Honeywell's adjusted profit per share for Q1 was $2.45, exceeding estimates of $2.32.
Looking ahead, Honeywell provided a Q2 revenue forecast of $9.4 billion to $9.6 billion, falling short of the $9.73 billion consensus estimate. The company's aerospace division, set to spin off on June 29, still anticipates high-single-digit percentage sales growth for 2026, with executives noting improvements in supply chain performance in March and April. Wolfe Research, however, lowered its price target on Honeywell stock to $281 from $296 due to the aerospace weakness, noting the division's core sales growth of 3% missed its high-single-digit guidance.
