MW Smaller is better for Honeywell, as profit outlook is raised ahead of Solstice spinoff

By Tomi Kilgore

Honeywell expects Solstice's stock to start trading next week, the automation and aerospace separations should be completed next year

Honeywell raised its profit outlook above Wall Street expectations, even when accounting for the separation of its advanced-materials business, slated for the end of October.

Shares of Honeywell International Inc. rallied in early Thursday trading after the aerospace and defense company raised its full-year earnings outlook, even as the separation of its advanced-materials business is set to be completed in the coming days.

Solstice Advanced Materials is slated to become an independent publicly traded company on Oct. 30, with the stock trading on the Nasdaq exchange under the ticker symbol "SOLS." As a result, Honeywell $(HON)$ on Thursday adjusted its previous guidance for 2025 sales, earnings per share and free cash flow to reflect that the business was discontinued.

Including the spinoff, the new outlook for earnings per share would be $10.24 to $10.44. But, given the strength in Honeywell's remaining businesses, the company said it now expects 2025 EPS of $10.60 to $10.70, which is above the average analyst estimate compiled by FactSet of $10.53.

The stock climbed 4.3% in premarket trading, enough to lead the Dow Jones Industrial Average's DJIA early gainers.

The company added that it now expects full-year sales of $40.7 billion to $40.9 billion - above the adjusted previous guidance of $40.1 billion to $40.6 billion.

The separation of the company's automation and aerospace businesses, which was announced in February, is still expected to be completed in the second half of 2026.

Honeywell's breakup script follows the successful separation of General Electric, as that company's new focus as an aerospace company $(GE)$ has helped propel the stock to a record high this week. Shares of the power and energy business, GE Vernova Inc. (GEV), have soared 75.1% in 2025 through Wednesday.

Also read: Is Honeywell a quantum-computing stock now? There's a new link to Nvidia.

Separately on Thursday, Honeywell reported third-quarter net income that rose 29.2% from a year ago to $1.83 billion, while adjusted earnings per share of $2.82, which excludes nonrecurring items, beat the FactSet EPS consensus of $2.57.

Net sales for the quarter grew 7% to $10.41 billion, above expectations of $10.15 billion, as aerospace sales increased 15.3% to $4.51 billion, and combined industrial and building-automation revenue slipped 2.2% to $4.15 billion.

Honeywell's stock has shed 8.5% in 2025 through Wednesday, while Industrial Select Sector SPDR ETF XLI has rallied 16% and the S&P 500 index SPX has advanced 13.9%.

-Tomi Kilgore

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October 23, 2025 08:33 ET (12:33 GMT)

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