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Honeywell (HON) provided a revised outlook for FY25, though the lowered revenue and EPS guidance is entirely due to the reclassification of its Advanced Materials unit as a discontinued operation following the spinoff of Solstice Advanced Materials (SOLS) on October 30. Despite the accounting shift, the company’s core operational guidance for Q4 remains intact.

• HON also disclosed a one-time $470 mln charge in Q4 related to a potential settlement of long-standing litigation with Flexjet.
• This litigation, stemming from disputes over maintenance service agreements and engine performance (specifically the HTF7000 series), has been an overhang for years. The settlement effectively "cleans the decks" without impacting non-GAAP results.
• The company maintained its Q4 organic growth guidance of 8-10% and segment margin guidance of 22.5-22.8%, signaling confidence in its execution through the end of the year.
• Aerospace Technologies continues to be the primary engine of growth, reporting a 15% revenue jump in 3Q25. Growth was driven by a robust commercial aftermarket -- fueled by increased flight hours -- and double-digit gains in Defense & Space amid elevated global defense spending.
• In Q3, the Energy and Sustainability segment saw an 8% increase in revenue, bolstered by strong demand for smart energy solutions and decarbonization technologies within the UOP (Universal Oil Products) business.
• HON is on track to spin off its Aerospace business in 2H26, a move designed to unlock value by creating a pure-play aerospace leader while leaving "RemainCo" as a focused automation powerhouse.

Briefing.com Analyst Insight:

HON is aggressively 'pruning the tree' to transform from a traditional multi-industry conglomerate into a simplified, high-growth entity. The lowered FY25 guidance is a classic 'accounting noise' event -- investors should look past the headline reduction, as it is strictly a byproduct of the SOLS spinoff. More importantly, the $470 mln Flexjet settlement removes a significant legal distraction that has plagued the Aerospace segment's narrative. However, the upcoming 2026 Aerospace spinoff remains the real catalyst. By separating its crown jewel (Aerospace), HON is betting that the remaining 'Automation' core, comprising Building Automation, Industrial Automation, and Process Automation & Technology, can command a higher multiple as a pure-play software and digital transformation company.