Honeywell began fiscal 2025 on a strong note, reporting Q1 net sales of $9.8 billion, an 8% year-over-year increase, underscoring solid top-line growth despite ongoing macroeconomic uncertainty. Organic sales rose 4%, with growth fueled by standout performances in Aerospace and Building Automation. The company’s operating income reached $1.97 billion, up 6% from the prior year, while segment profit climbed 8% to $2.26 billion, maintaining a stable 23.0% margin.

While net income held steady at $1.45 billion, adjusted EPS increased 7% to $2.51, highlighting underlying earnings strength. Free cash flow surged 61% to $346 million, driven by favorable customer advances, even as accounts receivable rose. Capital deployment remained aggressive, with $1.9 billion returned to shareholders via buybacks and $732 million in dividends, alongside a strategic $2.2 billion acquisition of Sundyne, announced in March.

Segment-wise, Aerospace Technologies led the way with 14% sales growth, boosted by a 15% increase in commercial aftermarket and 10% growth in defense and space, despite a 190-basis-point margin contraction due to acquisition mix. Building Automation delivered a particularly impressive quarter, with sales up 19%, strong order momentum, and a 150-basis-point margin expansion. Energy & Sustainability Solutions posted modest sales growth (+2%) but achieved a 230-basis-point margin gain, aided by commercial excellence and the LNG acquisition. In contrast, Industrial Automation faced headwinds, with a 4% sales decline and 11% drop in segment profit, affected by soft PPE demand and receivables write-downs.

Honeywell continues to reshape its portfolio, progressing toward the planned separation of its Aerospace and Automation units and a spin-off of Advanced Materials, targeting completion by the second half of 2026. The upcoming $1.3 billion divestiture of the PPE business, expected to close in Q2, is a step toward this transformation.

Looking ahead, management raised its full-year adjusted EPS guidance to $10.20–$10.50, reflecting confidence in continued margin expansion and strong cash generation. The company now expects full-year sales of $39.6–$40.5 billion and free cash flow of $5.4–$5.8 billion, assuming timely closure of the PPE sale.

Overall, Honeywell’s Q1 2025 results reflect a balanced blend of operational strength, strategic execution, and capital discipline, positioning the company well for long-term value creation amid evolving market dynamics.