Investing.com -- Honeywell International Inc (NASDAQ:HON) disclosed it expects up to $500 million in tariff-related exposure this year, largely driven by rising tensions with China, but its leadership expressed confidence that mitigation efforts will fully offset the impact. “We are confident we can fully offset the impact of current tariffs,” said CEO Vimal Kapur on the company’s first-quarter 2025 earnings call Tuesday.
Roughly two-thirds of that projected exposure stems from China, CFO Mike Stepniak confirmed. “About 60% to 70% of overall $500 million tariff exposure is for China,” he said, noting that Honeywell’s aerospace and industrial automation segments bear the brunt of this cost pressure.
Kapur emphasized that the company’s long-standing “local for local” manufacturing strategy, producing goods in the same regions where they are sold, offers a natural hedge against shifting global trade dynamics. Combined with targeted pricing actions and materials productivity improvements, Kapur said Honeywell expects “to offset the impact of this $500 million of tariff.”
Despite trade uncertainty, Honeywell maintained its 2025 revenue and earnings guidance and raised the midpoint of its full-year EPS forecast. The company expects adjusted earnings per share between $10.20 and $10.50 and revenue of $39.6 billion to $40.5 billion.
Results in the first quarter demonstrated strong momentum, even amid a shifting macro environment. The company reported adjusted EPS of $2.51, beating Wall Street expectations of $2.21, while revenue rose 8% year over year to $9.82 billion.
Kapur said Honeywell’s teams were “meeting daily to review and respond to tariff announcements,” and that the commercial environment remains rational across its key verticals, such as aerospace aftermarket, where pricing resilience helps absorb cost shocks.
Stepniak confirmed the company has incorporated tariff-related demand erosion in its projections, especially in shorter-cycle businesses like industrial automation. However, he said the team remains “very confident in the second half… and definitely by fourth quarter, we’ll be in a stable operating mode,” assuming no further disruptions.
In parallel with its tariff response, Honeywell is progressing on a historic restructuring. Kapur stated that “a tax free spin of Honeywell Aerospace will be most efficient way to separate our automation and aerospace businesses,” part of a broader plan to split Honeywell into three independent, focused companies.
