Honeywell Aerospace cuts FY2026 outlook as supply-chain issues persist

Transcript intelligence

What changed

Honeywell Aerospace reported 5% organic sales growth to $4.5 billion but said supply-chain constraints kept performance below expectations. It lowered FY2026 guidance, disclosed a $50 million inventory obsolescence charge, and highlighted more than $1 billion of remediation and capacity investment.

Guidance delta

Management lowered FY2026 guidance, citing supply-chain constraints: 4–5% organic sales growth, adjusted EBIT of $4.35–$4.45 billion, EPS of $7.60–$7.90, and free cash flow of $1–$1.5 billion.

Key takeaways

• Supply-chain bottlenecks were the main operational headwind and led to a modest FY2026 guidance reduction.
• Management cited a $15 billion year-to-date order backlog and major commercial and defense wins.
• More than $1 billion of investment is planned to expand capacity, multi-sourcing, and supplier tooling.
• A $50 million inventory obsolescence charge added to near-term profitability pressure.
• Management remained confident in longer-term growth tied to new avionics, actuation, safety, and navigation programs.

Management priorities

• Remediate supply-chain bottlenecks through multi-sourcing, in-sourcing, and supplier-tooling investment.
• Expand production capacity for Assure and inertial sensors.
• Roll out the Honeywell Aerospace Operating System across sites.
• Pursue pricing actions and long-term contract renegotiations.
• Develop growth opportunities tied to Anthem, Assure, SURF-A, RMU upgrades, and Civitanavi navigation technology.