Honeywell Aerospace shares plunge after weak first standalone quarter

Honeywell Aerospace shares plunged 24% on August 6, 2026, after supply-chain problems led to slower sales and prompted the newly independent company to cut its outlook for the rest of 2026.

The selloff followed Honeywell Aerospace’s first quarterly report since it separated from Honeywell Technologies and began trading on the Nasdaq on June 29.

Shares fell as much as 26% during the day and were trading near $157 late in the session, after the stock closed at $220.19 on its first day of regular trading little more than a month ago.

Honeywell Aerospace reported second-quarter sales of $4.52 billion, up 5% from a year earlier. The company said demand remained strong, but shortages of mechanical parts limited how much equipment it could deliver to aircraft manufacturers, airlines and defense customers.

The company cut its expected sales growth for 2026 to between 4% and 5%, down sharply from the 7% to 9% range it gave investors before becoming an independent company.

Honeywell Aerospace now expects adjusted earnings of between $7.60 and $7.90 per share for the year. Its earlier forecast called for operating profit of about $4.7 billion. The new range is between $4.35 billion and $4.45 billion.

The sudden change appeared to catch investors off guard because Honeywell Aerospace had laid out its earlier targets only weeks before completing the spinoff.

Company executives blamed the cut mainly on suppliers failing to increase production as quickly as expected.

“It’s really resetting the forecast based on what we’re seeing coming through the supply chain,” Chief Financial Officer Josh Jepsen said. “And that’s where we’ve been most impacted, is by the lack of ramp in that supply.”

Honeywell Aerospace supplies engines, auxiliary power units, avionics, flight controls, wheels, brakes and other systems used across commercial, business and military aircraft.

Its backlog reached $18.2 billion at the end of the quarter, up 9% from a year earlier.

Honeywell said it has been giving priority to parts needed by Boeing and Airbus as the two aircraft manufacturers work to increase production.

That has left fewer components available for Honeywell’s commercial aftermarket business, which supplies replacement parts and services to aircraft already in operation. Aftermarket sales rose 8% during the quarter, while sales of equipment for new commercial aircraft increased 6%. Defense and space sales rose 3%.

The company said output improved slightly from the first quarter but remained constrained across all three of its main markets.

Honeywell Aerospace also recorded about $50 million in charges tied to inventory it no longer expects to sell or use. The charge contributed to a decline in operating profit despite higher sales.

Second-quarter operating profit was about $1 billion, down from the same period last year. Adjusted earnings came to $1.87 per share, below the level expected by analysts.

The weakness was concentrated in Honeywell’s Engines and Power Systems business, which includes propulsion engines and auxiliary power units. Sales in the division rose only 1%, while its profit dropped sharply from a year earlier.

Honeywell’s Electronic Solutions business performed better, with sales rising 8%. Control Systems sales increased 7%.

The company said the conflict in the Middle East did not have a meaningful effect on second-quarter results. It also reported continued strength in business aviation despite higher fuel prices.

Honeywell Aerospace completed its separation from the former Honeywell International in June as part of a wider breakup of the industrial company. The post Honeywell Aerospace shares plunge after weak first standalone quarter appeared first on AeroTime.

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