TLDR
- Honeywell Aerospace (HONA) stock fell about 12% to $155.73 on Thursday despite beating third-quarter estimates.
- EPS came in at $2.21 on $4.6 billion in sales, ahead of the $1.87 Wall Street expected.
- The company raised 2026 operating profit guidance to $4.5 billion from $4.4 billion.
- Sales grew just 2% year over year, and net profit rose only 1%.
- Tariff refunds added about $500 million to operating profit, according to Jefferies.
Honeywell Aerospace (HONA) stock fell about 12% to $155.73 by 11:02 a.m. ET Thursday. The drop came a day after the company beat third-quarter earnings forecasts and raised its profit outlook. The stock traded between $153.00 and $166.18 during the session.
The aerospace supplier reported earnings per share of $2.21 on sales of $4.6 billion. Analysts had expected about $1.87 per share on roughly the same sales figure. Volume reached 2.4 million shares, below the average of 3.8 million.
The stock actually rose after the report came out late Wednesday. It traded above $180 for a short time. Then it slid back to $171.40 and kept falling on Thursday.
Management now expects 2026 operating profit of $4.5 billion. That is up from about $4.4 billion in the prior forecast. Sales growth guidance stayed at 4% to 5%.
It is a small raise, but the history matters here. In August, the company cut its profit outlook from $4.7 billion to $4.4 billion. It also cut its sales growth range from 7% to 9%.
Why Investors Sold
The stock fell 23% on Aug. 6 after the second-quarter report. Shares had climbed about $20 from that closing level before Thursday’s drop. Some traders may simply be taking profits.
The growth numbers were soft. Sales rose 2% from a year ago, and net profit gained 1%. Commercial original equipment sales jumped 7%, but that is the company’s smallest division.
Commercial aftermarket sales grew 2%. Defense and space sales rose 1%. Those two units are much larger, so they carry more weight.
Tariff refunds also helped the quarter. Jefferies analyst Sheila Kahyaoglu said they added about $500 million to operating profit. She still called the quarter and guidance relatively stable.
What Analysts and Management Said
Vertical Research Partners analyst Rob Stallard said the company was “steadying the ship.” Melius analyst Scott Mikus said the results cleared “a low bar.” Neither sounded excited.
CEO Jim Currier struck a more upbeat tone. He said results were above expectations for the first quarter as a stand-alone company. He pointed to higher sales and adjusted EBIT, both sequentially and from a year ago.
Wall Street had been cutting estimates before this report. Operating profit forecasts fell from about $4.6 billion to $4.3 billion after the second quarter. Estimates will likely rise by about $200 million now.
Valuation is another talking point. The Motley Fool noted the stock trades at about 20 times free cash flow. Free cash flow is running at an annualized rate of roughly $2.6 billion.
The company has won more than $20 billion in new contracts this year. That is about 1.5 times its $13.5 billion in year-to-date revenue. The book-to-bill ratio is a bright spot in an otherwise mixed report.
Honeywell Aerospace was spun out of Honeywell Technologies (HON) in June. Its market cap now sits near $56.11 billion. The 52-week range runs from $149.19 to $297.50, putting the stock close to its yearly low.
Earlier Thursday, the stock was down about 10.5% as of 10:30 a.m. ET. By 11:02 a.m., the loss had widened to 12%, or $21.30 from Wednesday’s close of $177.03.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
