Supply chain improvements did not continue at pace newly solo company anticipated, Currier says.
Honeywell Aerospace has hauled back its 2026 financial guidance, with chief executive Jim Currier saying projections issued two months ago were unrealistically optimistic about the health of the company’s supply chain.
“I underestimated how long it would take to implement and see traction from the corrective measures we had taken and are taking,” Currier told investors during Honeywell Aerospace’s second-quarter earnings call on 5 August. “Our supply base has not been able to ramp in the manner we were expecting earlier this year.”
That overestimation is why Honeywell Aerospace on 5 August adjusted downward its financial expectations, saying it now anticipates a 4-5% year-on-year sales increase in 2026 and a $4.35-4.45 billion full-year profit (before interest and taxes).
Currier’s team previously told investors to expect better.
During a 3 June investor day ahead of Honeywell Aerospace’s split from then-parent Honeywell, chief financial officer Josh Jepsen said the firm’s 2026 sales were on track to increase 7-9% year on year. He said 2026 adjusted profit would come in at $4.65-4.75 billion, adding: “We expect solid performance in 2026, which is a foundational year as we become an independent company.”
Honeywell Aerospace split from Honeywell on 29 June, becoming an independent public company in a move executives insist better positions it to overcome past troubles.
Speaking on 5 August, executives said supply chain improvements they had previously seen did not continue at the same pace.
“After a few years of double-digit output growth, we faced supply chain constraints in the first quarter that resulted in factory volume growth below expectations,” Currier said. “One of my top priorities as CEO is to ensure we execute on our promises to investors. Obviously, today is a far cry from this standard.”
A 6 August research note from JP Morgan notes: “Honeywell’s supply chain issues are more severe and more stubborn than most of its peers.”
Still, executives are standing behind another goal communicated on 3 June: for sales to increase an average 6-8% annually through 2030 and for the firm to turn a $6.5 billion adjusted profit that year.
“Nothing has really changed from a structural perspective,” says Jepsen.
During the second quarter, Honeywell Aerospace’s revenue increased 5% year on year to $4.5 billion. Its profit slipped 70% year on year to $256 million.
The “result fell short of expectations across all end markets”, says JP Morgan.
Currier says parts shortages “remain contained to a handful of material and supplier bottlenecks” and that “critical and constrained suppliers represent roughly 2% of our supply base”.
He calls out providers of cast, forged and machined parts (including ball bearings) as problem areas, but adds: “The issue is not reflective of [the] underlying health of our operation.”
The company disclosed some measures underway to address parts shortages. It is now “qualifying” 50 new suppliers to “expand capacity for constrained components” and plans to qualify another 50 in the second half of this year.
Honeywell Aerospace also expects its “investment in supplier tooling” will increase 20% in the second half of 2026 compared to the first half, with 70% of spending targeting production of forged components.
Executives “indicated repeatedly that [they have] used ‘brute force’ to address these challenges in recent years but [are] now adopting a more strategic and sustainable approach, though this could take time to implement”, says JP Morgan.
The post Honeywell Aerospace slashes guidance, CEO ‘underestimated’ recovery challenge first appeared on FlightGlobal.