HON · Q2 FY2026
HONEYWELL INTERNATIONAL INC Q2 FY2026 earnings analysis
By SageNoodle ResearchNeutral
| Metric | Actual | Estimate | Result |
|---|---|---|---|
| Revenue | $9.72B | $9.32B (yr ago) | Beat |
| EPS | $17.83 | $4.90 (yr ago) | Beat |
| Free Cash Flow | $0.96B | $1.09B (yr ago) | Miss |
| Gross Margin | 35.7% | 39.3% (yr ago) | Miss |
| Operating Margin | 23.0% | 22.8% (yr ago) | Beat |
What changed
Revenue increased 4.3% year over year and operating margin improved 0.2 percentage points, but gross margin contracted 3.6 points and free cash flow declined 11.9%. Reported EPS rose to $17.83 alongside the aerospace separation, making it a poor measure of recurring quarterly earnings without additional reconciliation.
Impact on the investment thesis
With no prior company fair value, we establish a $205 baseline based on normalized trailing free cash flow rather than reported EPS. The quarter does not support a higher valuation because cash flow and gross margin weakened while separation-related comparability remains limited.