Honeywell Aerospace spin-off prompts Charitable Trust exit after outlook cut
Jim Cramer’s Charitable Trust plans to exit Honeywell Aerospace at a roughly 15% loss after the new public company reduced 2026 targets.
By Maya Okafor · Markets Writer
· 3 min read
Jim Cramer’s Charitable Trust plans to sell its entire Honeywell Aerospace spin-off position, a move that puts the focus on the newly independent company’s reduced 2026 outlook and supply constraints. CNBC Investing Club said the trust would sell 320 HONA shares at about $172 shortly after the opening bell, leaving it with no position and locking in an estimated loss of roughly 15%.
The sale is a disclosed decision by the Charitable Trust, rather than a view from Honeywell Aerospace itself. The trust said it had expected a clean operational launch after the separation, drawing comparisons with other industrial and aerospace breakups. It now says an early execution shortfall has damaged management’s credibility and will take time to repair.
Honeywell Aerospace became a standalone public company on June 29, after its separation from former parent Honeywell Technologies. Its first results update as an independent company arrived August 5, when it reported second-quarter sales of $4.522 billion, up 5% from a year earlier, according to its earnings release.
Why did the Charitable Trust exit Honeywell Aerospace?
The central issue was a reset to Honeywell Aerospace’s full-year targets. The company cut expected organic sales growth to 4% to 5%, from a previous 7% to 9%. It also reduced projected pro forma standalone adjusted EBIT, a company-adjusted measure of operating profit, to $4.35 billion to $4.45 billion from $4.65 billion to $4.75 billion.
Honeywell Aerospace also introduced full-year pro forma standalone adjusted earnings-per-share guidance of $7.60 to $7.90. CNBC reported that the outlook was below Street consensus, while the trust cited the guidance changes in explaining its sale.
Company executives attributed the reduced forecast to supply constraints that restricted output growth during the quarter. Chief Executive Jim Currier said Honeywell Aerospace had brought its guidance in line with what its supply chain had demonstrated it could deliver by the end of the second quarter.
What did Honeywell Aerospace report?
- Second-quarter adjusted EBIT was $995 million, down 7% year over year.
- Backlog reached $18.154 billion, a 9% increase from the prior year.
- Net income was $256 million for the quarter.
- Second-half free-cash-flow guidance remained $1.0 billion to $1.5 billion.
The earnings figures show a mixed picture: sales and backlog increased, while adjusted EBIT declined. Honeywell Aerospace said roughly $100 million of separation-related costs and inventory-obsolescence charges were included in the adjusted-EBIT decline.
The company has outlined steps intended to ease its supply bottlenecks, including qualifying more than 50 new suppliers, planning another 50 in the second half, increasing spending on supplier tooling, and expanding the number of parts sourced from multiple suppliers by more than 15% this year. Those are company-described actions, and their effect on output remains to be seen.
For individual investors, the development separates a portfolio manager’s decision from the underlying business update: the trust has exited after the forecast cut, while Honeywell Aerospace is attempting to improve supply-chain capacity as an independent company.
This story draws on original reporting from CNBC.
