Honeywell's First Post-Spin 10-Q: Q3 Sales $4,994M, EPS $2.08, SEC Probe Disclosed
HON is trading near its 52-week low of $195.769 (5.9% above the low) on light trading volume (0.2× avg).
Summary
Honeywell's first post-spin quarter delivered 1% sales growth to $4,994 million and $2.08 diluted EPS, with gross margin up 440 basis points to 40.4%. The 10-Q also discloses a formal SEC investigation into financial reporting matters, including the former Performance Materials and Technologies segment.
Key Events · Earnings and Guidance · HON
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First Standalone Quarter: Sales $4,994M
Q3 2026 net sales rose 1% to $4,994 million from $4,929 million, as 5 points of price and 3 points of acquisitions were offset by 9 points of divestitures (WWS and PSS).
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EPS Falls on Prior-Year One-Timers
Net income attributable to Honeywell was $664 million, or $2.08 diluted, versus $1,825 million and $5.71 a year ago, which included an $802 million Resideo termination gain. Gross margin rose 440 basis points to 40.4%.
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SEC Formal Investigation Disclosed
Honeywell is cooperating with a formal SEC investigation focused on certain financial reporting matters, including the former Performance Materials and Technologies segment; it does not expect a material adverse effect.
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Debt Cut to $16.6B From $34.6B
Total borrowings fell to $16.6 billion from $34.6 billion at year-end 2025 after $7.5 billion of tender offers and redemptions, which produced a $241 million loss on debt extinguishment; cash fell to $5,694 million from $12,273 million.
Analysis · HON · Manufacturing
The first full quarter as a pure-play automation company, following the June 29 Aerospace spin-off, comes with headline numbers muddied by that reshaping. Sales rose only 1% to $4,994 million, as divestitures (WWS and PSS) stripped out 9 points of growth while price added 5 points and acquisitions 3. Gross margin jumped 440 basis points to 40.4%, yet net income fell to $664 million ($2.08 diluted) from $1,825 million a year ago, a figure flattered by the $802 million Resideo termination gain. One-time items dominate the nine-month picture: a $6,629 million gain on deconsolidating Quantinuum, a $241 million loss on debt extinguishment from $7.5 billion of tenders, and a $311 million write-down on assets held for sale. Deleveraging on the balance sheet is real, with total borrowings down to $16.6 billion from $34.6 billion and cash at $5,694 million. Most likely to draw scrutiny is the disclosure that Honeywell is cooperating with a formal SEC investigation into financial reporting matters, including the former Performance Materials and Technologies segment; the company says it does not expect a material adverse effect, but the probe is a new governance overhang on top of Negative outlooks at S&P and Moody's.
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At the time of this filing, HON was trading at $207.29 on NASDAQ in the Manufacturing sector, with a market capitalization of approximately $65.9B. The 52-week trading range was $195.77 to $260.15. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.