Honeywell Aerospace Starts Paying A $0.40 Dividend While Carrying A $2.5 Billion Equity Deficit
The spin-off's first 10-Q shows $15.9 billion of debt, a $3.5 billion buyback with no shares bought and a new securities suit.
Honeywell Aerospace, the aerospace and defense supplier spun out of Honeywell, declared its first quarterly dividend of $0.40 a share while its balance sheet showed a total equity deficit of $2,489 million at September 26, against equity of $8,496 million at December 31, 2025. The 10-Q, filed Wednesday, also discloses a securities class action against the company, its CEO and its CFO.
Debt flips equity negative
Long-term debt stood at $15,853 million, against $4 million at the end of 2025. The company issued $16.0 billion of senior unsecured notes tied to the spin-off and sent $9.1 billion of net cash proceeds, plus $6.0 billion of the notes themselves, to Honeywell as partial payment for the assets it received.
Net interest expense was $187 million in the third quarter, against net income of $5 million a year earlier. Management ties the increase to those notes. Cash rose to $1.6 billion from $213 million.
Nine-month operating cash flow fell to $1,014 million from $1,864 million. The company cites $391 million more in interest payments, $380 million of spin-off transaction costs and $377 million of Flexjet litigation settlement payments, partly offset by $159 million from the timing of customer collections.
A dividend and an unused buyback
The board declared the $0.40 dividend on Wednesday, payable December 4 to holders of record November 13. The company says future dividends remain subject to board approval.
A $3.5 billion buyback authorized July 23 sits beside it. The program carries no expiration date and does not obligate the company to buy, and it has not repurchased any shares to date.
Third-quarter sales rose to $4,644 million from $4,533 million, and net income to $737 million from $654 million, the company reported. The company also raised its full-year pro forma standalone adjusted earnings-per-share guidance to $7.85 to $8.00. The company will also pay Honeywell $1,125 million over five years for the trademark license: an initial $18.75 million payment plus 59 monthly payments of the same size.
A new suit and a trial date
The 10-Q discloses Green v. Honeywell Aerospace, a putative securities class action filed September 22 in federal court in Arizona against the company, its CEO and its CFO. It covers buyers of the stock between June 29 and September 1 and cites statements about supply chain, financial outlook and a cybersecurity-related government matter. No lead plaintiff has been appointed, no class certified, and the company cannot estimate a loss.
A jury trial in the Paradigm Powerboats trade-secrets case was scheduled for November 3, though a short continuance may be granted. The company, which began trading as HONA on June 29, says spin-off transaction costs are expected to continue through at least fiscal 2027.
The first $0.40 payment goes out December 4 to holders of record on November 13.
Sources
- 10-Q Filing — Honeywell Aerospace (HONA) — SEC EDGAR
- 10-Q Filing — Honeywell Aerospace (HONA), Q2 FY2026 filed 2026-08-05 (comparison basis) — SEC EDGAR
- 8-K Filing — Honeywell Aerospace, filed 2026-10-28 (Items 2.02, 7.01, 8.01, 9.01) — SEC EDGAR
- Earnings release (8-K Item 2.02, exhibit991q32026earningsre.htm) — Honeywell Aerospace, filed 2026-10-28 — SEC EDGAR
- Honeywell Aerospace Inc. Non-GAAP EPS of $2.21 beats by $0.35, revenue of $4.6B beats by $20M (HONA:NASDAQ) | Seeking Alpha — seekingalpha.com
- Honeywell Aerospace Lifts 2026 Second-Half Free Cash Forecast, Declares Dividend — Reuters
- Honeywell Aerospace: Q3 Earnings Snapshot | wusa9.com — Associated Press
- Honeywell Aerospace to Release Q3 Earnings: What's in the Cards? — Yahoo Finance
- Honeywell Aerospace Inc. (HONA) Stock Price, Quote, News & Analysis | Seeking Alpha — seekingalpha.com
