Oct 22, 2026 earnings call — Organic growth, margin expansion, backlog momentum
Company raised 2026 adjusted EPS to $8.40 to $8.45 and full-year organic growth to 4% to 5%.
Revenue $5.0B (est $5.0B) · EPS $2.27 (est $2.17)
Key quotes
"Importantly, with accelerated progress this quarter, we now expect to eliminate all remaining stranded costs by the end of 26."
"we believe PANT is beginning a multiyear growth inflection fueled by robust project backlog and continued capital investment in energy sector, especially in Africa, Middle East, US."
"We are also launching new offerings on our Forge platform both in Building Automation and Process Automation Technology, creating a robust foundation for future growth."
Analyst Q&A 12
confidence in Q4 orders
Q (Nigel Coe · Wolfe): Analyst asked why management is confident Q4 order growth will materialize and what they have seen in October so far.
A: Management said early October trends are at or above expectations, they use statistical performance, win rates and build contingency into forecasts. They also noted they excluded last year's large low carbon LNG order from the comparison.
"So far, Nigel, the first 3 weeks of October has been trending on and above expectations." — Vimal Kapur (CEO·CHAIR)
Industrial Automation outlook and margins
Q (Julian Mitchell · JPMorgan): Analyst asked how confident management is in continued IA margin expansion and whether IA order rates show any concern in the choppy macro.
A: Management said they are confident in continued top-line recovery and margin expansion based on improving fundamentals: on-time delivery up to 60%, past dues down 18%, strong new product acceptance. They expect IA to end the year at 22% margin and target 25% by 2029; Michal added PAT margins will expand in 2027 as catalyst mix improves and CT integration progresses.
"Confident on continued performance in both top line recovery and margin rate expansion." — Vimal Kapur (CEO·CHAIR)
incremental margins and inflation
Q (Steve Tusa · Wells Fargo): Analyst asked if core incremental margin on volume is about 40% and asked for color on the 53 bps inflation number and expectations for Q4.
A: Management confirmed core incrementals are about 40% and said price-to-cost in Q3 was about 30 bps net positive. They noted prices averaged about 3.5% in H1 and will average about 4.5% in H2 (4% for the year) and expect inflation elevated into year end then abating in the first half next year.
"Price to cost in the third quarter was about 30 bps net positive." — Michal Stepniak (CFO)
Fire & Security growth and FORGE
Q (Scott Davis · Melius): Analyst asked what is driving share gains and growth in Fire & Security and how FORGE is sold to customers.
A: Management said growth comes from faster new product introductions and end-market mix change. FORGE increases value by connecting products (example: remote fire panel configuration) and reduces commissioning time, which helps channels; they also have unique data center and battery detection products and LNL S2 is growing internationally.
"What it does is, Scott, that while the software content is low, it pulls the core product." — Vimal Kapur (CEO·CHAIR)
Process Automation long-term growth
Q (Amit Mehrotra · UBS): Analyst asked about the mid/long-term steady-state growth opportunity for Process Automation Technology beyond 2027.
A: Management sees growth on both project and aftermarket sides: backlog strong for LNG, investments in Africa, Middle East and Asia, and low-carbon projects ramping. They noted 100 SAF licenses with only about 20% built so far, catalyst growth mid-teens in Q4, and expect sustained demand and margins from catalyst, services and software over multiple years.
"So we see, Amit, the growth in Process Automation and Technology both on the project side and on the aftermarket in services and catalyst side." — Vimal Kapur (CEO·CHAIR)
Q4 deceleration and meter deployment timing
Q (Nicole DeBlase · Deutsche Bank): Analyst asked why organic growth slightly decelerates in 4Q by segment and for more color on utility meter deployment deferrals and timing.
A: Management said the modest deceleration is more conservatism and mix within the quarter, with short-cycle orders very strong. On meters, they said new gas and water meter technology is under utility testing (each utility tests separately), which can take about 6 to 9 months, and that rollouts should convert into major deployments in 2027 and beyond.
"I would say probably this is just more of conservatism than anything else." — Michal Stepniak (CFO)
P&T aftermarket and IA product growth
Q (Andrew Obin · BofA): Analyst asked why P&T aftermarket didn't pick up more sequentially despite easier comps and what it would take for IA products to grow materially faster.
A: Management said the P&T differences are project sequencing rather than headwinds; overall P&T revenue profile is similar Q3 to Q4 and catalyst demand is accelerating into mid-teens. For IA, they said improved delivery, past-due reduction and new product penetration drive a move from low to mid-single-digit growth in 2027; they noted IA core orders were up 15% in Q3 and Q4 orders expected high-single-digit.
"I would simply call it the cycle of the projects." — Vimal Kapur (CEO·CHAIR)
data centers and M&A priorities
Q (Andrew Kaplowitz · Citi): Analyst asked how the data-center ecosystem might help growth in 2027+ and how management views M&A as leverage comes down.
A: Management said data centers are becoming a pan-company strategy, adding process automation, sensing and pumps (e.g., liquid cooling) to building automation content; they see high growth potential outside the U.S. On M&A, priority is to reduce leverage to about 3.0x or below, then consider disciplined deals focused on measurement/sensing, higher-growth verticals, and tuck-ins, but their 2029 $12 target is organic so M&A is optionality.
"it is truly becoming a pan-Honeywell strategy, and we continue to improve our content." — Vimal Kapur (CEO·CHAIR)
self-help and cost opportunities
Q (Vertical Research Partners): Analyst asked where the biggest self-help opportunities are and what management is most excited about heading into next year.
A: Management highlighted shared services and lighter headquarters, value and component engineering, supply-chain and NPI improvements, and AI adoption across teams as key productivity levers. They added CT integration is yielding higher cost synergies than expected and cross-selling across segments (data centers, life sciences, semiconductor) is another source of self-help.
"And finally, we are obviously working through adoption of AI." — Michal Stepniak (CFO)
project pipelines and refinery timing
Q (Joe Ritchie · Goldman Sachs): Analyst asked whether customer investment pipelines have increased with higher Brent and whether refiners are deferring work as crack spreads rise.
A: Management said investments are driven by energy security, fuel diversity and low-carbon projects (example: large African refinery expansions like Dangote and SAF/carbon capture projects), creating a multiyear cycle less tied to oil price. They acknowledged U.S. refiners running hotter causes some deferrals (uptime), but much aftermarket work can be done online and deferred work is pent-up demand that should eventually show up.
"When you add it all together, it is less linked to the oil price." — Vimal Kapur (CEO·CHAIR)
labor risk and IA margin drivers
Q (Bernstein): Analyst asked if project delivery timing has been stretched by labor shortages and how much IA margin improvement came from spins versus productivity.
A: Management said labor shortages are a trend but not a concern for them because much of backlog is outside North America and LNG equipment is built in their own factories where they have capacity. On IA margins, Michal said roughly 150+ bps is organic improvement from operations and the rest relates to the TW separation.
"Not a concern because large part of our backlog is actually not in North America." — Vimal Kapur (CEO·CHAIR)
pricing pressure and where it's hardest
Q (BMO): Analyst asked which businesses require the biggest pricing push and where pricing is most challenging across the portfolio.
A: Management said pricing attainment is fairly consistent across businesses in a narrow range (about 3.5% to 4.5%) and pricing drivers vary by inputs like semiconductors, electronics and metals. They said achieving price requires good customer service, communication and new-product pipeline combined with pricing action to keep price-cost positive.
"So it is a very narrow range for us" — Vimal Kapur (CEO·CHAIR)