Honeywell Aerospace's stock dropped 21% following disappointing second-quarter results after its separation from Honeywell Technologies. The company reported $4.5 billion in sales and $1 billion in operating profit, falling short of expectations. Additionally, it revised its 2026 sales growth guidance down to 4-5% from 7-9% and reduced expected operating profit to approximately $4.4 billion. The report highlighted ongoing supply chain issues and competitive pressures, indicating that recovering investor trust may take time for management. Comparatively, peers in the market reported significantly better results.

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Honeywell Aerospace Stock Plunges. Its First Standalone Quarter Was a Mess.

By Al Root

Updated Aug 06, 2026, 10:39 am EDT / Original Aug 06, 2026, 8:13 am EDT

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Coming into Thursday trading, shares of Honeywell Aerospace were down about 8% since being spun off from Honeywell Technologies. (ERIC PIERMONT/AFP via Getty Images)

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Honeywell Aerospace stock fell after reporting weak second-quarter results following its June spinoff.
Honeywell Aerospace reported second-quarter sales of $4.5 billion and operating profit of $1 billion, missing Wall Street expectations.
Honeywell Aerospace lowered its 2026 sales growth guidance to 4% to 5% and cut its expected operating profit to about $4.4 billion.

Honeywell Aerospace

HONA\ \ -18.59% stock plunged after the company reported its—very weak—initial quarter following its separation from Honeywell Technologies HON\ \ -2.18% in June.

It will take management a while to recover investor trust.

Shares of the aerospace and defense supplier dived 21% to $161.21 in early trading, while the S&P 500

SPX\ \ -0.22% and Dow Jones Industrial Average DJIA\ \ -0.76% were both up about 0.1%.

After the close Wednesday, Honeywell Aerospace reportedExternal link second-quarter sales of $4.5 billion, up 5% year over year, and operating profit of $1 billion. Wall Street was looking for $4.6 billion in sales and $1.1 billion in operating profit.

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Operating profit fell 7% year over year, partly due to inventory obsolescence charges. Investors don’t see those every day.

Wall Street and investors had some idea of how the quarter would go after Honeywell Technologies reported earnings. That quarterly report still included the aerospace business. What investors weren’t ready for was guidance.

Honeywell Aerospace expects full-year sales growth of 4% to 5%, down from a prior expectation of 7% to 9%. Operating profit in 2026 will be about $4.4 billion, down from a prior expectation of $4.7 billion. Wall Street was projecting operating profit of about $4.6 billion before the earnings report.

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A guidance cut is one thing. Honeywell Aerospace’s previous guidance, however, was provided just weeks ago in early JuneExternal link. Such a sudden cut destroys investors’ confidence in management forecasts.

“After a tough 1Q, during which Honeywell Aerospace’s core sales growth lagged Aerospace & Defense peers by a wide margin across all three end-markets (commercial aftermarket, commercial OE, and defense), 2Q wasn’t much better,” wrote Melius Research analyst Scott Mikus on Wednesday. “The acute supply chain issue from last quarter did not improve as much as management had hoped.”

Honeywell Aerospace reported 8% growth in commercial aftermarket sales, he added. Peers reported 23% growth.

Parker-Hannifin stock soared 9.3% in early trading on Thursday after reporting better-than-expected fiscal fourth-quarter profitsExternal link. For fiscal year 2027, Parker sees earnings per share of $34.75. Wall Street projects $33.75. Howmet Aerospace stock rose 3.3% after it reported better-than-expectedExternal link profits. Sales grew 24% year over year.

“It’s no secret that Honeywell Aerospace has been a source of frustration for its customers, and the company’s $2 billion-plus of overdue backlog continues to grow,” added Mikus. “Further, coming out of Covid, airlines have turned to repairs and PMA parts (akin to generic drugs in aerospace) to reduce maintenance costs and alleviate spare parts shortages. If [the company] can’t resolve its supply-chain issues and improve on-time delivery, it risks losing a portion of its future high-margin aftermarket revenue stream.”

“While it is good that Honeywell Aerospace recognizes that it has problems, fixing them will not be an overnight affair,” wrote Vertical Research Partners analyst Rob Stallard. “While the company has a broadly diversified revenue mix, it has relatively less exposure to attractive Aerospace & Defense subsectors like large commercial engines or missiles than other companies. Put together, we see Honeywell’s growth continuing to lag its peers. While the valuation is relatively inexpensive, we fear that this could be a value trap.”

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Shares are trading for about 23 times expected 2026 earnings. GE Aerospace

GE\ \ -1.40% trades for 48 times. GE Aerospace, of course, grew second-quarter operating profit 18% year over year and raised full-year financial guidance in July.

Honeywell Aerospace won’t get a better multiple, however, until growth and execution improve.

Write to Al Root at allen.root@dowjones.comExternal link

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