Honeywell Aerospace raises 2026 free cash flow outlook, starts dividend

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Honeywell Aerospace cash flow outlook

Highlights

Honeywell Aerospace raises its 2026 free cash flow forecast's lower end to $1.2 billion from $1 billion, maintaining the upper end at $1.4 billion.
The board approves a $0.40 per-share quarterly dividend payable on Dec. 4, 2026, with Q3 reporting $500 million in free cash flow and $737 million net income, up 13%.
Improvement in supplier performance and new material sources support 2027 sales and output growth, offsetting pressures from persistent supply-chain challenges.

Updated cash outlook and shareholder payout

As reported by Reuters, Honeywell Aerospace on Wednesday raises the bottom end of its free cash flow forecast for the second half of 2026 to $1.2 billion from $1 billion, while keeping the top end unchanged at $1.4 billion. The company also says its board approves a quarterly cash dividend of $0.40 per share, payable on Dec. 4, 2026, to shareholders of record at the close of business on Nov. 13, 2026.

Arizona-based Honeywell Aerospace says pro forma standalone adjusted earnings per share for full-year 2026 is expected to reach $7.85 to $8.00, up from its earlier forecast of $7.60 to $7.90. It reiterates its earlier organic sales growth guidance of 4% to 5% for 2026.

For the third quarter, the company reports $500 million in free cash flow and net income of $737 million, up 13% from a year earlier. Chief Executive Jim Currier says in a statement that the dividend decision reflects visibility into durable free cash flow growth in the years ahead.

Supply-chain recovery and production plans

Honeywell Aerospace says some suppliers that have been constraining production are showing encouraging signs of improvement, a factor that supports its updated outlook. Currier says that progress, together with the ongoing qualification of additional material sources, positions the company for higher sales and output growth in 2027 and beyond.

Aircraft and defense manufacturers remain under pressure to secure more parts as planemakers raise jet production and airlines contend with high fuel prices. In August, after its spin-off, Honeywell Aerospace cut its 2026 sales growth forecast and issued a weaker-than-expected earnings outlook as persistent supply-chain problems limited its ability to meet strong aftermarket demand.

Management has previously described 2026 as a transition period marked by investment in suppliers, manufacturing capacity and workforce expansion to lift production. The company begins trading on Nasdaq in June after being spun off from Honeywell in a three-way split.

In our earlier coverage of the S&P 500’s approach to the 8,000 level, we outlined how investors were hinging the next leg of the rally on exceptionally strong third-quarter earnings despite headwinds from higher oil prices, elevated Treasury yields, and election-related uncertainty. The piece also flagged concentration risk—where a handful of megacaps drive index performance—alongside weakening market breadth, leaving equities more vulnerable to earnings disappointments.

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