Honeywell Aerospace blamed supply chain woes for its lowered 2026 sales growth forecast and weaker-than-expected earnings outlook, released on August 5. The problems have hampered the company’s ability to meet surging — and more profitable — aftermarket demand.
Reuters reported that the company, which spun off from Honeywell in a three-way split in June 2026, said supply constraints are forcing it to prioritize original equipment deliveries to Boeing and Airbus, which has diverted output from its higher-revenue, higher-margin aftermarket business. It is also said it has been favoring domestic defense and space programs over typically higher-margin international contracts.
"Demand continues to be really robust. It's really a supply challenge," Chief Financial Officer Josh Jepsen told Reuters.
Honeywell Aerospace, which makes aircraft engines, parts and defense systems lowered its expected 2026 sales growth to 4-5% from a 7-9% increase forecast earlier.
The company had expected supply chain fixes to boost output more quickly this year, CEO James Currier said during a post-earnings call. "Our actions thus far just have not been good enough. They have not led to the output inflection that I expected only a few months ago," Currier said.
In order to address the supply chain issues, Honeywell Aerospace said it is quadrupling spending on multi-sourcing and in-sourcing initiatives in 2026.
