Howmet Aerospace Inc. (HWM) Earnings

metirFinance

Sep 2026upcoming

Next quarter

Expected to report Oct 29, 2026 — estimated from last year’s reporting date.

Consensus is $1.25 EPS for Sep 2026 across 1 estimates, ranging $1.25 to $1.25.

HWM Jun 2026

Reported Aug 6, 2026 · before the open

: 8.13%

: $1.23
: $1.33
: —
: $2.55B

Reported results

: $2.55B; from $2.05B
: $711.00M; from $521.00M
: 27.92%; from 25.38%
: $534.00M; from $407.00M
: $1.33; from $1.00

Highlights

Beat: Q2 diluted EPS was $1.33 versus $1.23 consensus, an 8.13% surprise; adjusted EPS was also $1.33, up 46% year over year.
Growth: Revenue rose 24% year over year to $2.547 billion, including 21% organic growth, with commercial aerospace up 28%, defense aerospace up 11% and gas turbines up 38%.
Margins: Adjusted EBITDA increased 39% to $817 million, while adjusted EBITDA margin expanded 340 basis points year over year to 32.1%.
Core engine strength: Engine Products revenue grew 32% to $1.373 billion and segment adjusted EBITDA rose 51% to $517 million; margin reached 37.7%, up 470 basis points.
Guidance: Full-year revenue guidance rose to $10.00-$10.10 billion, adjusted EBITDA to $3.21-$3.25 billion, adjusted EPS to $5.23-$5.31 and free cash flow to $1.85-$1.95 billion.
Cash generation: Q2 operating cash flow was $583 million and free cash flow was $479 million after $104 million of capital expenditures; first-half free cash flow reached $838 million.
Capital returns: Howmet repurchased $300 million of stock in Q2 and another $200 million in July, bringing year-to-date repurchases through July to $800 million; the quarterly dividend rose 17% to $0.14.
CAM integration: The company completed the approximately $1.8 billion CAM acquisition on April 6, adding to Fastening Systems, whose revenue rose 37% to $589 million and adjusted EBITDA rose 40% to $177 million.
Mixed transportation and portfolio effects: Forged Wheels volumes remained 8% below year-ago levels but rose 7% sequentially, while Engineered Structures revenue fell 13% to $269 million following the Savannah divestiture and product rationalization.

Analysis

Howmet delivered a strong Q2 FY2026 print, with diluted EPS of $1.33 beating the $1.23 consensus by 8.13% and matching adjusted EPS. Revenue of $2.547 billion rose 24% year over year and 10% from Q1's $2.313 billion, while adjusted EBITDA increased 39% year over year to $817 million and margin expanded 340 basis points to 32.1%. GAAP operating income was $711 million, down from $753 million in Q1, and net income was $534 million versus $580 million, reflecting Q1's benefit from a $93 million divestiture gain.

The quarter was defined by broad aerospace and gas turbine demand, particularly in Engine Products, where revenue grew 32% and adjusted EBITDA rose 51% with 470 basis points of margin expansion. CAM and Brunner lifted Fastening Systems, although acquisition-related costs and higher interest expense followed the $1.8 billion CAM purchase. Cash conversion was another central feature: Q2 free cash flow was $479 million and first-half free cash flow was $838 million, funding $300 million of buybacks. Management raised full-year baseline guidance by $400 million for revenue, $170 million for adjusted EBITDA, $0.33 for adjusted EPS and $150 million for free cash flow.

Guidance and operating leverage

Management raised the full-year outlook after Q2 revenue, adjusted EBITDA, adjusted EBITDA margin and adjusted EPS all exceeded the high end of its prior guidance. The increase reflects sustained demand across commercial aerospace, defense and gas turbines rather than only the CAM contribution.

Full-year baseline: Revenue guidance increased to $10.05 billion, adjusted EBITDA to $3.23 billion, adjusted EPS to $5.27 and free cash flow to $1.90 billion. The respective baseline increases were $400 million, $170 million, $0.33 and $150 million.
Third quarter: Revenue is guided to $2.575 billion, adjusted EBITDA to $830 million, adjusted EBITDA margin to 32.2% and adjusted EPS to $1.35.
Demand commentary: Commercial aircraft build rates are supported by record backlogs, engine spares demand is increasing, defense demand remains healthy and gas turbine demand was described as extraordinary. Commercial transportation has begun a modest recovery.

Aerospace segment momentum

The strongest operating evidence came from Engine Products, which combines exposure to commercial and defense aerospace, engine spares and gas turbines. The segment expanded both revenue and profitability despite adding labor ahead of expected volume growth.

Engine Products: Revenue increased 32% year over year to $1.373 billion; adjusted EBITDA rose 51% to $517 million and margin expanded to 37.7% from 33.0%. The segment absorbed approximately 485 net employees in Q2 and about 720 in the first half.
End markets: Company revenue increased 28% in commercial aerospace, 11% in defense aerospace and 38% in gas turbines. Aerospace represented approximately 68% of first-half revenue.
Fastening Systems: Revenue rose 37% to $589 million and adjusted EBITDA rose 40% to $177 million, with margin up 90 basis points to 30.1%. Growth reflected commercial and defense aerospace demand plus CAM and Brunner.

CAM and portfolio reshaping

The quarter included the first full reporting period with CAM ownership from April 6, making Fastening Systems the main acquisition beneficiary. The acquisition expanded aerospace fasteners, fluid fittings and connectors, but it also increased the company's balance sheet, depreciation and corporate costs.

CAM: Howmet paid approximately $1.812 billion net of cash acquired. CAM and Brunner together contributed approximately 2% of consolidated sales and approximately 1% of consolidated net income from their acquisition dates through June 30.
Engineered Structures: Revenue declined 13% to $269 million and adjusted EBITDA fell 6% to $64 million, primarily because of the Savannah disk forging divestiture and product rationalization. Margin nevertheless improved 170 basis points to 23.8%.
Integration and costs: Q2 acquisition-related costs were $22 million. Interest expense rose to $51 million from $38 million a year earlier, although debt actions are expected to reduce annualized interest expense by $12 million.

Cash flow and capital allocation

Cash generation was strong enough to support both the CAM transaction and shareholder returns, while the company continued to invest in capacity. The balance sheet reflects acquisition financing, with debt and short-term borrowings higher than at year-end.

Free cash flow: Q2 operating cash flow was $583 million and free cash flow was $479 million after $104 million of capital expenditures. First-half operating cash flow rose 48% year over year to $1.036 billion, while free cash flow rose 75% to $838 million.
Shareholder returns: Q2 buybacks totaled $300 million at an average $250.61 per share; July buybacks added $200 million. Year-to-date repurchases through July reached $800 million, with $697 million of authorization remaining as of August 6.
Funding and investment: First-half capital expenditures were $198 million, and full-year capital spending is expected to be approximately 5% of sales. June 30 debt totaled $4.501 billion, including $450 million of commercial paper, versus $3.050 billion at December 31.

Transportation recovery

Forged Wheels remained the softest demand area, but management saw an early sequential improvement. Revenue growth was largely driven by aluminum and inflationary cost pass-through rather than volume, while cost reductions protected profitability.

Forged Wheels: Revenue increased 14% year over year to $316 million despite commercial transportation volumes falling 8%. Volumes rose 7% sequentially from Q1, indicating the beginning of a North American recovery.
Profitability: Segment adjusted EBITDA rose 16% to $88 million and margin improved 30 basis points to 27.8%, supported by lower net headcount and cost reductions.
Outlook: Management expects commercial transportation demand to remain low in 2026, with a modest recovery continuing in the second half amid energy, economic, regulatory and aluminum-price uncertainty.

Howmet Aerospace Inc.

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