Honeywell Aerospace Slashes 2026 Growth Forecast Amid Supply Chain Headaches

Honeywell Aerospace, a newly spun-off company from Honeywell, has lowered its 2026 sales growth forecast due to supply-chain woes. The aerospace firm expects organic sales growth of 4% to 5%, down from a previous estimate of 7% to 9%. This decrease is attributed to persistent supply-chain hurdles that are forcing the company to prioritize original equipment deliveries to Boeing and Airbus, diverting output from its higher-revenue aftermarket business.

The company's shares tumbled 12% in extended trading after it issued a weaker-than-expected earnings outlook. Honeywell Aerospace expects annual adjusted earnings per share of $7.60 to $7.90, below analysts' average estimate of $8.86. The firm incurred about $100 million of separation-related costs and inventory obsolescence charges, resulting in a 7% year-on-year fall in quarterly core profit.

Despite higher sales volumes and pricing supporting revenue growth, profitability came under pressure from higher costs and an unfavorable business mix. The company's CEO, Jim Currier, stated that 'secular trends across our end-markets remain strong.' Commercial aftermarket sales rose 8%, while defense and space sales increased 3% and commercial OE rose 6%. However, quarterly profit in its electronic solutions segment fell 3% and engines and power systems dropped 32%, while control systems posted an 8% rise.