Honeywell International Inc. (HON) shares jumped more than 5% on Thursday after the company delivered its first quarterly report since spinning off its aerospace business, raising its full-year profit forecast even as it trimmed its revenue outlook.

The industrial conglomerate reported second-quarter adjusted earnings per share of $4.52, coming in below the $4.81 analysts were expecting. But revenue rose 4% year over year to $9.719 billion, topping the consensus estimate of $9.506 billion. Organic sales also grew 4%, and orders climbed 4%, pushing the company's backlog to about $38 billion.

Excluding the now-separate Aerospace Technologies business, organic sales were up 4% and orders surged 16%, with that backlog reaching around $20 billion.

Adjusted segment profit rose 5% to $2.24 billion, and segment margin expanded 30 basis points to 23.1%. Cash flow looked solid too: operating cash flow increased to $1.28 billion from $1.06 billion a year ago, and free cash flow jumped 43% to $1.25 billion. The company ended the quarter with $8.75 billion in cash and equivalents.

Segment Performance

Honeywell's remaining businesses—after the aerospace spin-off—showed a mixed picture.

Building Automation was a standout, with organic sales up 9% year over year. Building products rose 10%, driven by strong fire business growth, and building solutions increased 7%, led by services. Orders rose 13%, supported by demand from data centers and hospitality. Segment margin expanded 90 basis points to 27.1%, thanks to volume leverage and pricing.

Industrial Automation saw organic sales grow 4%, with solutions up 10% on utilities projects and warehouse backlog conversion. Products edged up 1% on sensing and industrial measurement demand. Segment margin improved 90 basis points to 17.2%, helped by pricing and productivity.

Process Automation and Technology was the weak spot: organic sales declined 1%, with aftermarket sales down 6%. Orders, however, jumped 24% on LNG strength. Segment margin contracted 180 basis points to 22.1%, due to lower catalyst volumes and an unfavorable mix.

Last month, Honeywell completed the spin-off of its Aerospace Technologies business into a new public company, Honeywell Aerospace Inc. (HONA). In the quarter, that business posted organic sales growth of 5%, driven by 17% growth in commercial aviation original equipment and 7% growth in aftermarket demand. Results were impacted by material supply constraints, while defense and space sales were flat due to production timing. Segment profit rose 2% to $1.1 billion, including a $40 million inventory obsolescence charge.

Outlook

For the full year, Honeywell raised its adjusted EPS guidance to $8.05–$8.35 from $7.90–$8.30. But it lowered its sales forecast to $19.8 billion–$20.0 billion from $19.9 billion–$20.2 billion, which is below the $20.286 billion analysts were expecting.

For the third quarter, the company expects adjusted EPS of $2.05–$2.20 (versus the $2.06 estimate) and revenue of $4.9 billion–$5.0 billion (well below the $5.253 billion consensus). For the fourth quarter, it forecasts adjusted EPS of $2.28–$2.43 (consensus: $2.27) and sales of $5.0 billion–$5.1 billion (versus the street view of $5.240 billion).

Honeywell said it expects the Process Automation & Technology business to accelerate in the third quarter, driven by higher project activity, catalyst shipments, and a strong backlog. It also projects Industrial Automation growth to improve in the second half, led by product demand.

At the time of publication Thursday, Honeywell shares were up 5.49% at $245.78.