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HWM Q2 Earnings Beat Estimates on Aerospace, Turbine Growth
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Key Takeaways
Howmet Aerospace's Q2 adjusted EPS rose 46% to $1.33, while revenues climbed 24% to $2.55 billion.
HWM's Engine Products revenues jumped 32%, with adjusted EBITDA up 51% and margin reaching 37.7%.
Howmet Aerospace raised 2026 revenue guidance to $10.00-$10.10 billion and EPS to $5.23-$5.31.
Howmet Aerospace Inc. (HWM - Free Report) reported second-quarter 2026 adjusted earnings of $1.33 per share, up 46% year over year. The figure beat the Zacks Consensus Estimate of $1.23.
Revenues of $2.55 billion increased 24% year over year and surpassed the consensus mark of $2.41 billion. Organic growth was 21%, supported by commercial aerospace, defense aerospace and gas turbine demand.
HWM's Commercial Markets Fuel Revenue Growth
Commercial aerospace revenues rose 28% year over year and represented 53% of total revenues. Growth reflected stronger aircraft production activity and increasing demand for engine spare parts.
Gas turbine revenues advanced 38% and accounted for 13% of the total. Defense aerospace revenues increased 11%, while commercial transportation revenues rose 12%. Other-market revenues grew 39%.
Howmet Aerospace Inc. Price, Consensus and EPS Surprise
Engine Products generated revenues of $1.37 billion, accounting for 53.9% of consolidated revenues. Segment revenues increased 32% year over year, driven by commercial aerospace, defense aerospace and gas turbine demand.
Segment adjusted EBITDA climbed 51% to $517 million. The adjusted EBITDA margin expanded 470 basis points to 37.7%. Howmet Aerospace added approximately 485 net employees in the segment during the quarter to support expected revenue growth.
HWM's Fastening Systems Gets Acquisition Lift
Fastening Systems revenues increased 37% year over year to $589 million, representing 23.1% of total revenues. Results benefited from commercial and defense aerospace growth as well as contributions from the CAM and Brunner acquisitions.
Segment adjusted EBITDA rose 40% to $177 million. The adjusted EBITDA margin improved 90 basis points to 30.1%, reflecting higher demand, acquisition contributions and sustained productivity gains.
Howmet Aerospace's Other Segments Show Mixed Trends
Engineered Structures revenues declined 13% to $269 million due to the divestment of the Savannah disk forging facility and product rationalization. Segment adjusted EBITDA decreased 6% to $64 million, while the margin increased 170 basis points to 23.8% following the exit of lower-margin business.
Forged Wheels revenues rose 14% to $316 million as aluminum and other inflation-related cost pass-through more than offset an 8% decline in commercial transportation volumes. Volumes improved 7% on a sequential basis. Segment adjusted EBITDA increased 16% to $88 million, with the margin edging up 30 basis points to 27.8%.
HWM's Margin Expansion Supports Profitability
Adjusted EBITDA increased 39% year over year to $817 million. The adjusted EBITDA margin expanded 340 basis points to 32.1%, supported by growth across major aerospace and gas turbine markets.
Adjusted operating income rose 41% to $733 million. The adjusted operating margin improved 350 basis points to 28.8%. Cost of goods sold increased 16.9% to $1.60 billion, while selling, general, administrative and other expenses rose to $148 million from $89 million.
Howmet Aerospace's Cash Flow Backs Capital Deployment
Howmet Aerospace generated $583 million in cash from operations during the quarter, up 31% year over year. Capital expenditures were $104 million, resulting in free cash flow of $479 million, up 39% year over year.
The company repurchased $300 million of common stock during the quarter and another $200 million in July. Through July, repurchases totaled $800 million. Howmet Aerospace also increased its third-quarter dividend 17% to 14 cents per share.
HWM Raises 2026 Guidance
For the third quarter of 2026, HWM expects revenues of $2.565-$2.585 billion. Adjusted EBITDA is projected between $825 million and $835 million, while adjusted earnings are expected in the range of $1.34-$1.36 per share.
For 2026, Howmet Aerospace raised its revenue outlook to $10.00-$10.10 billion. Adjusted EBITDA is now anticipated between $3.21 billion and $3.25 billion, with adjusted earnings projected at $5.23-$5.31 per share. Free cash flow is expected in the range of $1.85-$1.95 billion.
Zacks Rank and Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks are discussed below:
Applied Industrial’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 4.0%. In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2026 bottom line has inched up 0.1%.
IDEX Corporation (IEX - Free Report) presently carries a Zacks Rank of 2. IDEX’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.7%. In the past 60 days, the Zacks Consensus Estimate for IEX’s 2026 earnings has increased 1.4%.
The Middleby Corporation (MIDD - Free Report) currently carries a Zacks Rank of 2. Middleby’s earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 10.4%. In the past 60 days, the Zacks Consensus Estimate for MIDD’s 2026 earnings has increased 0.3%.
View the Zacks #1 Rank List
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HWM Q2 Earnings Beat Estimates on Aerospace, Turbine Growth
Key Takeaways
Howmet Aerospace Inc. (HWM - Free Report) reported second-quarter 2026 adjusted earnings of $1.33 per share, up 46% year over year. The figure beat the Zacks Consensus Estimate of $1.23.
Revenues of $2.55 billion increased 24% year over year and surpassed the consensus mark of $2.41 billion. Organic growth was 21%, supported by commercial aerospace, defense aerospace and gas turbine demand.
HWM's Commercial Markets Fuel Revenue Growth
Commercial aerospace revenues rose 28% year over year and represented 53% of total revenues. Growth reflected stronger aircraft production activity and increasing demand for engine spare parts.
Gas turbine revenues advanced 38% and accounted for 13% of the total. Defense aerospace revenues increased 11%, while commercial transportation revenues rose 12%. Other-market revenues grew 39%.
Howmet Aerospace Inc. Price, Consensus and EPS Surprise
Howmet Aerospace Inc. price-consensus-eps-surprise-chart | Howmet Aerospace Inc. Quote
Howmet Aerospace's Engine Products Posts Strong Gains
Engine Products generated revenues of $1.37 billion, accounting for 53.9% of consolidated revenues. Segment revenues increased 32% year over year, driven by commercial aerospace, defense aerospace and gas turbine demand.
Segment adjusted EBITDA climbed 51% to $517 million. The adjusted EBITDA margin expanded 470 basis points to 37.7%. Howmet Aerospace added approximately 485 net employees in the segment during the quarter to support expected revenue growth.
HWM's Fastening Systems Gets Acquisition Lift
Fastening Systems revenues increased 37% year over year to $589 million, representing 23.1% of total revenues. Results benefited from commercial and defense aerospace growth as well as contributions from the CAM and Brunner acquisitions.
Segment adjusted EBITDA rose 40% to $177 million. The adjusted EBITDA margin improved 90 basis points to 30.1%, reflecting higher demand, acquisition contributions and sustained productivity gains.
Howmet Aerospace's Other Segments Show Mixed Trends
Engineered Structures revenues declined 13% to $269 million due to the divestment of the Savannah disk forging facility and product rationalization. Segment adjusted EBITDA decreased 6% to $64 million, while the margin increased 170 basis points to 23.8% following the exit of lower-margin business.
Forged Wheels revenues rose 14% to $316 million as aluminum and other inflation-related cost pass-through more than offset an 8% decline in commercial transportation volumes. Volumes improved 7% on a sequential basis. Segment adjusted EBITDA increased 16% to $88 million, with the margin edging up 30 basis points to 27.8%.
HWM's Margin Expansion Supports Profitability
Adjusted EBITDA increased 39% year over year to $817 million. The adjusted EBITDA margin expanded 340 basis points to 32.1%, supported by growth across major aerospace and gas turbine markets.
Adjusted operating income rose 41% to $733 million. The adjusted operating margin improved 350 basis points to 28.8%. Cost of goods sold increased 16.9% to $1.60 billion, while selling, general, administrative and other expenses rose to $148 million from $89 million.
Howmet Aerospace's Cash Flow Backs Capital Deployment
Howmet Aerospace generated $583 million in cash from operations during the quarter, up 31% year over year. Capital expenditures were $104 million, resulting in free cash flow of $479 million, up 39% year over year.
The company repurchased $300 million of common stock during the quarter and another $200 million in July. Through July, repurchases totaled $800 million. Howmet Aerospace also increased its third-quarter dividend 17% to 14 cents per share.
HWM Raises 2026 Guidance
For the third quarter of 2026, HWM expects revenues of $2.565-$2.585 billion. Adjusted EBITDA is projected between $825 million and $835 million, while adjusted earnings are expected in the range of $1.34-$1.36 per share.
For 2026, Howmet Aerospace raised its revenue outlook to $10.00-$10.10 billion. Adjusted EBITDA is now anticipated between $3.21 billion and $3.25 billion, with adjusted earnings projected at $5.23-$5.31 per share. Free cash flow is expected in the range of $1.85-$1.95 billion.
Zacks Rank and Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks are discussed below:
Applied Industrial Technologies (AIT - Free Report) carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Applied Industrial’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 4.0%. In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2026 bottom line has inched up 0.1%.
IDEX Corporation (IEX - Free Report) presently carries a Zacks Rank of 2. IDEX’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.7%. In the past 60 days, the Zacks Consensus Estimate for IEX’s 2026 earnings has increased 1.4%.
The Middleby Corporation (MIDD - Free Report) currently carries a Zacks Rank of 2. Middleby’s earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 10.4%. In the past 60 days, the Zacks Consensus Estimate for MIDD’s 2026 earnings has increased 0.3%.