What Lies Ahead for Honeywell After Q4 Earnings Release

Honeywell International Inc. (HON) is set to report fourth-quarter 2025 results on January 29, before market open, and the investment community is watching closely to see if the industrial conglomerate can continue its streak of beating expectations. The real story lies in understanding what drives these results and whether the company’s growth trajectory remains on track heading into 2026.

The Numbers That Matter: Revenue and EPS Quotes Investors Should Know

Market consensus points to Q4 revenues of $10.16 billion, representing modest growth of just 0.7% year-over-year—a more muted expansion than some would hope for. However, earnings are expected to tell a different story. The consensus quote for earnings per share sits at $2.54, up 2.8% from the prior-year quarter despite a slight 1.2% downward revision in recent months. What’s most impressive is Honeywell’s consistent track record: the company has delivered better-than-expected results in each of the last four quarters, with an average earnings surprise of 8.7%. In the most recent quarter alone, the bottom line beat consensus by 10.2%—a margin that suggests strong operational execution beneath the surface.

Business Segments: Where the Real Growth Lies

The growth story across Honeywell’s divisions paints a picture of uneven momentum. Its Aerospace Technologies segment is expected to be a clear bright spot. Strong demand in commercial aviation aftermarket services, combined with improving supply chains and resilient defense spending, should drive segment revenues to approximately $4.31 billion—a substantial 19% jump year-over-year. This represents one of the company’s most dynamic growth engines.

The Building Automation segment is also positioned for solid performance. Increasing construction activity in North America, the Middle East, and India, coupled with rising demand from data center, healthcare, and hospitality projects, is anticipated to push revenues to $1.92 billion, reflecting 6.7% annual growth. This segment demonstrates how structural trends in digital infrastructure are reshaping demand patterns.

Industrial Automation Solutions is expected to face headwinds, however. The segment is projected to generate $2.30 billion in revenues—a 10.2% increase that may disappoint given broader economic uncertainty. Softness in productivity solutions due to lower license settlement payments and decreased demand in sensing and safety technologies is weighing on the outlook.

The Energy and Sustainability Solutions segment presents the starkest challenge. This division is expected to contract significantly, with revenues declining 29.9% year-over-year to just $1.22 billion. The decline stems from the UOP business, where licensing delays and reduced catalyst shipments are creating a temporary headwind.

Strategic Acquisitions: Building Momentum Through Strategic Integration

What lies beneath Honeywell’s growth narrative are significant acquisitions completed throughout 2025. In June, the company closed its acquisition of Sundyne, adding advanced pumping and compression solutions to its industrial portfolio. The integration of Sundyne’s products with Honeywell Forge technology is expected to enhance capabilities across multiple markets.

During the summer, Honeywell completed the acquisition of Nexceris’ Li-ion Tamer business in July, expanding its fire and life safety portfolio while opening doors to the energy storage and data center markets. Then in August, the company snapped up three utility platforms from SparkMeter—including Praxis for data analytics, GridScan for grid monitoring, and GridFin for energy cost management. These moves demonstrate Honeywell’s strategy of using M&A to fill portfolio gaps and drive synergistic growth.

The Investment Challenge: Earnings Whispers and Predictability

Here’s where the outlook becomes murkier. Honeywell carries an Earnings ESP (Estimate vs. Surprise) of -0.56%, meaning the Most Accurate Estimate of $2.53 per share runs slightly below the consensus $2.54. This negative ESP, combined with the company’s current Zacks Rank of 3 (Hold), suggests the predictive model doesn’t favor an earnings beat this cycle. The combination of positive ESP and a higher Zacks Rank has historically increased beat probability—a condition not met here.

Operational Pressures: The Margin Squeeze

Beyond the top-line challenges, Honeywell faces cost pressures that could squeeze margins. Higher direct and indirect material costs, combined with substantial investments in digital infrastructure and business integration activities, are expected to elevate operating expenses. Management will need to demonstrate strong pricing power and operational efficiency to protect profitability in an environment where input costs remain elevated.

Comparable Opportunities: Other Names Worth Watching

For investors seeking alternatives with stronger earnings beat potential during this reporting cycle, several peers deserve attention:

Dover Corporation (DOV) reports Q4 2025 results on January 29, the same day as Honeywell. With an Earnings ESP of +0.70% and Zacks Rank of 3, Dover has beaten earnings expectations in each of the trailing four quarters, averaging a 3.9% surprise.

Kennametal Inc. (KMT) is scheduled to release fiscal Q2 2026 results on February 4. The company boasts an impressive Earnings ESP of +8.57% and Zacks Rank of 1 (Strong Buy), suggesting higher beat probability. KMT has exceeded expectations in four consecutive quarters with an average surprise of 26.9%—significantly outpacing Honeywell’s track record.

Watts Water Technologies (WTS) is set to report Q4 2025 results on February 11. With an Earnings ESP of +0.59% and Zacks Rank of 2 (Buy), the company has also beaten consensus in each of the past four quarters, posting an average 10.9% surprise. The combination of positive ESP and higher Zacks Rank improves beat odds considerably for this name.

The divergence in earnings ESP and Zacks Rank across these industrial peers highlights an important principle: while Honeywell remains a quality franchise, the current earnings cycle may belong to competitors better positioned for surprise upside. Investors will need to weigh whether Honeywell’s consistent execution and strategic acquisitions justify holding the stock through a potentially disappointing quarter, or whether the risk-reward lies elsewhere in the industrial sector heading into the final months of Q1 2026.