Honeywell lifts 2025 profit outlook despite Solstice spinoff, shares rise

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By Utkarsh Shetti

(Reuters) -Honeywell on Thursday raised its 2025 profit forecast despite the impact of a planned separation of its advanced materials unit, signaling robust growth prospects fueled by strong aerospace demand, sending its shares up more than 7%.

The business, now named Solstice, is set to start trading independently on the Nasdaq from October 30 and is part of Honeywell’s plan to split into three independent companies.

Aerospace suppliers are enjoying robust demand for parts, benefiting from planemakers ramping up production at a time of booming demand for new jets.

The company’s aerospace business, however, has been pressured by higher costs and tariffs, but kept pricing steady, a trend expected to change next year. Margins in the segment fell 160 basis points in the quarter ended September.

“Pricing will become stronger next year and a lot of that is really driven just by tariffs stabilizing and that picture on inflation being much more clear,” CFO Mike Stepniak said on a call with analysts.

Honeywell now expects full-year adjusted earnings per share between $10.60 and $10.70, including a 21 cent hit from the Solstice separation, up from $10.24 and $10.44, also adjusted for the spinoff.

The aerospace business saw sales rise 15% to $4.51 billion in the third quarter, as supply chain snags also appeared to ease. That unit is set to be carved out from Honeywell in the second half of 2026.

What is left of Honeywell will be led by current CEO Vimal Kapur, who can now turn his attention on sprucing up the industrial automation business, which has been a drag on results of late.

Honeywell’s overall sales rose 7% to $10.41 billion in the reported quarter, coming above expectations of $10.14 billion, per data compiled by LSEG.

Adjusted profit per share was $2.82, also surpassing expectations of $2.57.

(Reporting by Utkarsh Shetti in Bengaluru; Editing by Shailesh Kuber)