Honeywell Intl Q2 2026 Earnings Call Transcript

Honeywell Intl (NASDAQ: HON ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This content is powered APIs. For comprehensive financial data and transcripts, visit View the webcast at Summary Honeywell Intl reported a strong second quarter with 4% organic sales growth, driven by building automation and industrial automation.

Orders grew 16% organically, with a notable 24% increase in process technology orders, bolstering confidence in second-half growth. The company raised its full-year outlook for organic growth, segment margin, and adjusted EPS, reflecting strong performance and divestiture benefits. Honeywell completed the acquisition of Johnson Matthey's Catalyst Technologies, enhancing its process automation portfolio. The divestitures of productivity solutions and warehouse business are expected to close by early August, ahead of schedule.

Building Automation continues to perform well, with 9% organic growth, while Process Automation Technology is expected to see a sharp growth inflection in the second half. The company is focused on expanding in high-growth verticals like data centers and renewable fuels, aligning with long-term macro trends. Honeywell maintains a strong balance sheet with a focus on debt retirement in 2026, while planning future M&A activity for 2027 and beyond. Management highlighted strong demand across Europe, Middle East, and China, contributing to robust growth in Industrial Automation.

Full Transcript OPERATOR Good morning. Thank you for standing by and welcome to the Honeywell Intl second quarter 2026 earnings conference call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session.

Please be advised that today's call is being recorded. I would now like to hand the call over to Mark Macaluso, Senior Vice President of Investor Relations. Please go ahead. Mark Macaluso, Senior Vice President of Investor Relations Thank you.

Good morning and welcome to Honeywell Intl second quarter 2026 earnings conference call. Joining me today are Honeywell Intl Chairman and Chief Executive Officer Vimal Kapur and Senior Vice President and Chief Financial Officer Mike Stepniak. This webcast and the presentation materials, including non-GAAP reconciliation, are available on our Investor Relations website. From time to time we post new information on the Investor Relations website that may be of interest or material to our investors.

Our discussion today include forward-looking statements that are based on our best view of the world and of our businesses as we see them today and are subject to certain risks and uncertainties, including those described in our recent SEC filings. This morning we will review financial results for Honeywell Intl for the second quarter of 2026 and discuss our updated guidance. And as always, we'll leave time for your questions at the end. I would also like to take a moment to remind our audience that the 2026 results and guidance we will present today exclude results from Honeywell Aerospace following the spinoff on June 29.

Additionally, our guidance reflects both the completion of the Johnson Matthey Catalyst Technologies acquisition as of July 17, as well as the anticipated closures of the productivity and warehouse divestitures which we now expect by early August. Pension income and the results of Quantinuum have also been removed from our adjusted results in all prior and future periods. Finally, adjusted EPS for Honeywell Intl now reflects the impact of the 1-for-2 reverse stock split. You'll find a summary of these changes on slide 3.

With that, it's my pleasure to turn the call over to Vimal who will begin on slide four. Vimal Kapur, Chairman and Chief Executive Officer Thank you Mark and good morning. The second quarter marked an important milestone for Honeywell Intl as we began our next chapter as a pure play automation company. At Investor Day, we laid out our go-forward strategy of growing and monetizing installed base through outcome-based services, software and new product innovation.

We also introduced long-term targets for Honeywell Intl which will be our roadmap for the next three plus years. And as you can see, we are laying the foundation today to deliver on our commitments. Our results this quarter have demonstrated the strength of the new Honeywell Intl portfolio, we delivered 4% organic sales growth driven by continued strength in building automation and a better than anticipated performance in both process automation and technology and industrial automation businesses. Orders grew 16% organically with broad-based demand across all segments resulting in 9% increase in ending backlog.

Notably, short cycle orders grew double digit across all segments and P&T orders were up 24% organically led by roughly 50% orders growth in process technology providing even greater confidence in their expected second half growth inflection. We also expanded segment margin by 100 basis point, overcoming significant cost inflation, headwinds and unfavorable mix through a combination of productivity and volume leverage. This drove earnings in the second quarter above our expectation from early June with increased confidence heading into the second half of the year.

As a result, today we are raising our full year outlook for organic growth, segment margin and adjusted earnings per share. We continue to expect a sharp growth inflection in process automation and technology and continued momentum in industrial automation in the second half of 2026. Combined with the sustained outperformance in building automation, we now expect to grow 4 to 6% organically in second half of the year in line with our long-term targets. 10 at the midpoint which reflects the second