Second Quarter 2026
Filed Aug 6, 2026Howmet Aerospace Reports Second Quarter 2026 Results Revenue up 24% Year over Year, Organic Growth 21%; GAAP EPS $1.33, Adjusted EPS $1.33; Full Year 2026 Guidance Increased
Second-quarter revenue grew 24% year over year, adjusted EBITDA rose 39%, adjusted EBITDA margin expanded 340 basis points, adjusted EPS increased 46%, and free cash flow increased 39%. The Company increased its full-year 2026 revenue, adjusted EBITDA, adjusted EPS, and free-cash-flow guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $2,547 million | – | 24% |
| Operating IncomeGAAP | $711 million | – | 36% |
| Operating Income MarginGAAP | 27.9% | – | 250 bps |
| Earnings per Share (EPS)GAAP | $1.33 | – | 33% |
| Cash from OperationsGAAP | $583 million | – | 31% |
| Adjusted EBITDAnon-GAAP | $817 million | – | 39% |
| Adjusted EBITDA Marginnon-GAAP | 32.1% | – | 340 bps |
| Adjusted Operating Incomenon-GAAP | $733 million | – | 41% |
| Adjusted Operating Income Marginnon-GAAP | 28.8% | – | 350 bps |
| Adjusted Earnings per Share (EPS)non-GAAP | $1.33 | – | 46% |
| Free Cash Flownon-GAAP | $479 million | – | 39% |
| Revenue, Six MonthsGAAP | $4,860 million | – | 22% |
| Operating Income, Six MonthsGAAP | $1,464 million | – | 44% |
| Operating Income Margin, Six MonthsGAAP | 30.1% | – | 470 bps |
| Earnings per Share (EPS), Six MonthsGAAP | $2.77 | – | 51% |
| Cash from Operations, Six MonthsGAAP | $1,036 million | – | 48% |
| Adjusted EBITDA, Six Monthsnon-GAAP | $1,557 million | – | 36% |
| Adjusted EBITDA Margin, Six Monthsnon-GAAP | 32.0% | – | 320 bps |
| Adjusted Operating Income, Six Monthsnon-GAAP | $1,399 million | – | 38% |
| Adjusted Operating Income Margin, Six Monthsnon-GAAP | 28.8% | – | 350 bps |
| Adjusted Earnings per Share (EPS), Six Monthsnon-GAAP | $2.56 | – | 45% |
| Free Cash Flow, Six Monthsnon-GAAP | $838 million | – | 75% |
| Engine Products Segment Adjusted EBITDAnon-GAAP | $517 million | – | 51% |
| Engine Products Segment Adjusted EBITDA Marginnon-GAAP | 37.7% | – | 470 bps |
| Fastening Systems Segment Adjusted EBITDAnon-GAAP | $177 million | – | 40% |
| Fastening Systems Segment Adjusted EBITDA Marginnon-GAAP | 30.1% | – | 90 bps |
| Engineered Structures Segment Adjusted EBITDAnon-GAAP | $64 million | – | (6)% |
| Engineered Structures Segment Adjusted EBITDA Marginnon-GAAP | 23.8% | – | 170 bps |
| Forged Wheels Segment Adjusted EBITDAnon-GAAP | $88 million | – | 16% |
| Forged Wheels Segment Adjusted EBITDA Marginnon-GAAP | 27.8% | – | 30 bps |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Engine ProductsGrowth in the commercial aerospace, defense aerospace, and gas turbines markets. | $1,373 million | – | 32% |
| Fastening SystemsGrowth in the commercial aerospace and defense aerospace markets. Revenue includes the impacts from the CAM and Brunner acquisitions. | $589 million | – | 37% |
| Engineered StructuresDivestiture of the Savannah disk forging facility and product rationalization. | $269 million | – | (13)% |
| Forged WheelsCommercial transportation market volumes were 8% lower, more than offset by an increase in aluminum and other inflationary cost pass through. Volumes increased 7% sequentially from the first quarter 2026. | $316 million | – | 14% |
Q3 2026 and FY 2026 outlook
- RevenueQ3 2026: Low $2,565 million, Baseline $2,575 million, High $2,585 million; FY 2026: Low $10,000 million, Baseline $10,050 million, High $10,100 million; FY 2026 Baseline Change +$400 million
- NoteQ3 2026 Adjusted EBITDA: Low $825 million, Baseline $830 million, High $835 million
- NoteQ3 2026 Adjusted EBITDA Margin: Low 32.2%, Baseline 32.2%, High 32.3%
- NoteQ3 2026 Adjusted Earnings per Share: Low $1.34, Baseline $1.35, High $1.36
- NoteFY 2026 Adjusted EBITDA: Low $3,210 million, Baseline $3,230 million, High $3,250 million; Baseline Change +$170 million
- NoteFY 2026 Adjusted EBITDA Margin: Low 32.1%, Baseline 32.1%, High 32.2%; Baseline Change + 40 bps
- NoteFY 2026 Adjusted Earnings per Share: Low $5.23, Baseline $5.27, High $5.31; Baseline Change +$0.33
- NoteFY 2026 Free Cash Flow: Low $1,850 million, Baseline $1,900 million, High $1,950 million; Baseline Change +$150 million
Capital returns
- Repurchased $300 million of common stock in the second quarter 2026 at an average price of $250.61 per share, retiring approximately 1.2 million shares.
- Repurchased an additional $200 million of common stock in July 2026 at an average price of $276.61 per share, retiring approximately 0.7 million shares.
- Year to date through July, repurchased $800 million of shares at an average price of $248.29 per share, exceeding the $700 million of shares repurchased in all of 2025.
- As of August 6, 2026, total share repurchase authorization available was $697 million.
- On July 27, 2026, the Board declared a dividend of $0.14 per share to be paid on August 25, 2026 to holders of record as of August 7, 2026. The quarterly dividend represents a 17% increase from the second quarter 2026 dividend of $0.12 per share.
What drove it
- Revenue growth was driven by 28% growth in commercial aerospace, 11% growth in defense aerospace, and 38% growth in gas turbines.
- Second-quarter organic revenue growth was 21%, excluding the net impact of the three asset transactions completed in 2026.
- Engine Products absorbed approximately 485 net headcount in the quarter in support of expected revenue increases.
- Fastening Systems benefited from the CAM and Brunner acquisitions.
- Forged Wheels benefited from aluminum and other inflationary cost pass through and reported sequential volume recovery in North American commercial transportation.
- Cost reductions, including lower net headcount, supported Forged Wheels adjusted EBITDA despite lower volumes.
Concerns
- Engineered Structures revenue decreased 13% year over year following the divestiture of the Savannah disk forging facility and product rationalization.
- Engineered Structures segment adjusted EBITDA decreased 6% year over year on the exit of lower-margin business including the divestiture.
- Forged Wheels commercial transportation volumes were 8% lower year over year.
- Capital expenditure requirements continue to increase, and the Company sees a need to increase them further in 2027.
- The Company completed the CAM acquisition for approximately $1.8 billion and stated that healthy cash generation is expected to enable a return to pre-CAM leverage levels in short order.
What to watch
- Execution against Q3 2026 revenue guidance of $2,565 million to $2,585 million and adjusted EBITDA guidance of $825 million to $835 million.
- Progress in commercial aerospace build rates, engine spares demand, defense demand, and gas turbines demand outlooks.
- Integration of the CAM acquisition, which management said is on track.
- The extent and timing of further capital expenditure increases planned for 2027.
- Recovery in the North American commercial transportation market and its effect on Forged Wheels volumes.
- Further common-stock repurchases under the remaining $697 million authorization.
Balance sheet and cash flow
- Free cash flow was $479 million after $104 million in capital expenditures.
- Completed the acquisition of CAM on April 6, 2026 for approximately $1.8 billion.
- On May 22, 2026, repaid the outstanding principal amount of its Japanese Yen-denominated senior unsecured term loan facility for approximately $186 million with cash on hand.
- Entered into a cross-currency swap to synthetically convert the outstanding $300 million aggregate principal amount of its 6.75% Bonds due 2028 into a Japanese Yen liability for a fixed interest rate of approximately 3.88%.
- The combined effect of the debt actions will reduce annualized interest expense by $12 million.
Analysis
Howmet reported a strong second quarter. Revenue was $2,547 million, up 24% year over year, with 21% organic growth excluding the net impact of three asset transactions. GAAP operating income increased 36% to $711 million and GAAP operating income margin rose 250 basis points to 27.9%. Adjusted EBITDA grew 39% to $817 million, while adjusted EBITDA margin expanded 340 basis points to 32.1%. GAAP EPS was $1.33 and adjusted EPS was also $1.33.
Demand was broad-based across the aerospace and gas-turbines end markets. Commercial aerospace grew 28%, defense aerospace grew 11%, and gas turbines grew 38%. Engine Products was the largest segment and delivered $1,373 million of third-party sales, up 32%, alongside a 470-basis-point expansion in segment adjusted EBITDA margin to 37.7%. Fastening Systems revenue increased 37% to $589 million, with CAM and Brunner acquisition impacts included. The acquisition mix was therefore a contributor to reported growth, while organic growth remained substantial.
Profitability improved despite incremental investment and acquisition absorption. Management cited the absorption of the CAM fastener acquisition in the 32.1% adjusted EBITDA margin. Engine Products added approximately 485 net headcount to support expected revenue increases. Engineered Structures was the exception on sales, with revenue declining 13% to $269 million following the Savannah disk forging facility divestiture and product rationalization, although segment adjusted EBITDA margin increased 170 basis points to 23.8%. Forged Wheels reported 14% revenue growth, but commercial transportation volumes were 8% lower year over year; aluminum and other inflationary cost pass through more than offset the volume decline.
Cash generation was also strong. Cash from operations was $583 million and free cash flow was $479 million after $104 million in capital expenditures. The Company deployed $300 million to second-quarter common-stock repurchases and another $200 million in July. It completed the CAM acquisition for approximately $1.8 billion, repaid approximately $186 million of Japanese Yen-denominated term-loan principal, and entered a cross-currency swap involving $300 million of 6.75% Bonds due 2028. Management said the combined debt actions reduce annualized interest expense by $12 million.
The guidance increase reinforces the reported momentum. Full-year 2026 revenue guidance is $10,000 million to $10,100 million, with the baseline increased by $400 million. Full-year adjusted EBITDA guidance is $3,210 million to $3,250 million, adjusted EPS guidance is $5.23 to $5.31, and free-cash-flow guidance is $1,850 million to $1,950 million. The primary execution items are the planned increase in capital expenditures, CAM integration, the expected return to pre-CAM leverage levels, and the developing recovery in commercial transportation volumes.
Management, verbatim
The Howmet team delivered a strong set of results, with revenue, adjusted EBITDA, adjusted EBITDA margin, and adjusted earnings per share all exceeding the high end of guidance. Revenue growth was healthy at 24% year over year and 21% excluding the net impact of the three asset transactions completed this year. Adjusted EBITDA margin expanded 340 basis points year over year to 32.1%, including the absorption of the CAM fastener acquisition in April. Free cash flow performance was excellent at $479 million after $104 million in capital expenditures, supporting the future growth rate of the Company. The free cash flow also enabled $800 million in common stock repurchases year to date through July, an amount already greater than total repurchases in 2025.
John Plant, Howmet Aerospace Executive Chairman and Chief Executive Officer
Looking ahead, Howmet is well positioned, with all our major markets in growth mode. More robust build rates for commercial aircraft are supported by record backlogs, while engine spares needs continue to increase. Defense markets remain healthy, and the focus for missiles, drones and collaborative combat aircraft continues with growth expected over the medium term. Demand in the gas turbines market is extraordinary with customers already revisiting and adding to their demand outlooks. The commercial transportation market has begun to recover, as anticipated.
John Plant, Howmet Aerospace Executive Chairman and Chief Executive Officer
Our capital expenditure requirements continue to increase, and we already see the need to increase this further in 2027 to support future organic growth expectations in both the aerospace and gas turbines markets. We closed the CAM acquisition in April, and the integration is on track. Continued healthy cash generation will allow us to achieve pre-CAM leverage levels in short order, with the Company well positioned to consider all paths of capital deployment optionality going forward.
John Plant, Howmet Aerospace Executive Chairman and Chief Executive Officer
Not in the filing
stated, not guessed- Period-end date
- GAAP net income
- Gross profit and gross margin
- Total debt
- Cash and cash equivalents balance
- Operating expenses
- Tax rate
- GAAP EPS guidance
- GAAP operating income guidance
- Q3 2026 free cash flow guidance
- Prior-quarter comparisons for consolidated financial metrics
- Prior-quarter revenue comparisons for Engine Products, Fastening Systems, and Engineered Structures
- Previous-release outlook for comparison with actual results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.