Honeywell's revenue, profit rise as aerospace aftermarket demand stays strong

By Aatreyee Dasgupta

Jan 29 (Reuters) - ⁠Honeywell reported a ⁠rise ‍in fourth-quarter revenue and profit on Thursday, buoyed by continued strength in its aerospace unit and related aftermarket services, sending the ‍industrial giant's shares up 4.5%.

A delay in aircraft delivery is prompting ​airlines to fly jets longer, boosting demand for parts and maintenance, and turning the ​high-margin aftermarket services business into a central profitability engine for the aerospace segment.

Honeywell's aerospace business has faced pressure from high costs, global trade tensions, but it has managed to ​hold pricing steady across its products and services.

Sales of its aerospace unit rose 13.4% to $4.52 billion during the fourth quarter.

Honeywell posted an adjusted ​per-share profit of $2.59 during the quarter, compared with $2.22 a year ago. Analysts estimated $2.54 per share, according to ‌data compiled by LSEG.

The results cap a constructive year for Honeywell, which announced a breakup of its large conglomerate structure ​to create three independent companies focused on ⁠automation, aerospace and advanced materials.

The company expects to complete the separation of its automation and aerospace businesses in the third ‌quarter.

Honeywell also concluded a strategic review of two of its businesses that cater to transportation and logistics, and intends to pursue their sale in the first half ‌of 2026.

It expects adjusted per-share profit for 2026 to be between $10.35 and $10.65, while analysts expect $10.38.

Overall ‌quarterly sales rose 6.4% to $9.76 billion, but came below the estimate of $9.85 billion.

DATA CENTERS ARE KEY CATALYST

Several industrial companies, including Dover, Caterpillar and GE Vernova, have pointed to ‍surging demand from AI-powered data centers as a growth driver in recent earnings.

"Data-center position of Honeywell in building automation (segment) ⁠is becoming slowly material. We are inching towards that becoming greater than 5% of our revenue," CEO Vimal Kapur said on post-earnings call.

Honeywell provides fire safety, cooling and building controls, and security systems to data centers.

(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Shilpi Majumdar)

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