Howmet Aerospace Inc. HWM used its second-quarter call to emphasize capacity expansion across commercial aerospace and industrial gas turbines, where customer demand is extending beyond 2026.
Alongside higher full-year guidance, executives highlighted spares activity, 2027 capital needs and CAM integration, while analysts focused on how quickly Howmet can add capacity without overbuilding.
HWM Raises 2026 Outlook Across the Board
Second-quarter revenue of $2.55 billion topped the $2.41 billion Zacks Consensus Estimate, while adjusted earnings of $1.33 per share exceeded the $1.23 Zacks Consensus Estimate. Revenue rose 24% year over year, with organic growth of 21%.
Executive chairman and CEO John Plant raised full-year guidance baselines to revenue of $10.05 billion, adjusted EBITDA of $3.23 billion, adjusted earnings of $5.27 per share and free cash flow of $1.9 billion.
Plant set third-quarter guidance baselines at revenue of $2.575 billion, adjusted EBITDA of $830 million and adjusted earnings of $1.35 per share, while incorporating normal third-quarter seasonality.
Howmet Builds for Multi-Year IGT DemandExecutive vice president and CFO Patrick Winterlich said gas turbine revenue rose 38% as electricity-generation demand, especially from natural gas for data centers, remained strong.
A Jefferies analyst pressed on competitive positioning. Executive chairman and CEO John Plant said Howmet holds more than 50% global share in industrial gas turbine blades and is expanding in Japan, Europe and Virginia.
A Bernstein analyst asked how quickly the company can respond. Plant said a new equipment commitment made now would take about two years to arrive, with larger additions extending through 2028, 2029 and 2030.
HWM Adds Aerospace Capacity for Higher Rates
Executive chairman and CEO John Plant said aircraft backlogs support higher build rates through the balance of 2026, into 2027 and beyond. Howmet also committed to another commercial aerospace plant expansion shortly before the call.
A Vertical Research analyst asked about wide-body production. Plant said Boeing 787 demand is moving toward Rate 10, while Airbus A350 production could move from roughly five or six per month to eight or nine over the next year.
An RBC Capital Markets analyst questioned supply-chain capacity. Plant stressed that Howmet will add capacity, but will monitor demand durability and avoid investing around a single-year peak.
Howmet Sees Spares Strength With Defense Upside
Executive vice president and CFO Patrick Winterlich said commercial aerospace revenue increased 28%, including 26% organic growth, while defense aerospace rose 11%. Total spares revenue increased 37% to about $460 million.
A Melius Research analyst asked whether recent military utilization was already lifting demand. Executive chairman and CEO John Plant said Howmet had not seen an order increase from additional missions, though customer discussions point to stronger spares requirements in 2027.
Plant added that missile customers are asking Howmet to consider rate increases across several programs. No formal incremental orders were in hand, leaving demand durability to be resolved before dedicated capacity is added.
HWM Maps CAM Synergies and Capital Returns
A Baird analyst focused on CAM integration. Executive chairman and CEO John Plant said early work centered on IT systems, employee benefits and the asset base, with some purchasing benefits expected in the second half of 2026 and most synergies in 2027.
Plant said CAM is expected to be about neutral to earnings per share in 2026 before contributing positively in 2027. Fastening Systems adjusted EBITDA margin was 30.1%.
A Citigroup analyst asked about cash deployment. Plant said Howmet is open to additional bolt-on M&A and expects 2027 share repurchases to exceed 2026 levels. Through July, repurchases totaled $800 million.
Howmet Keeps Investment Discipline in Focus
Executive chairman and CEO John Plant balanced demand-driven expansion with caution on end-market durability. He said capital expenditures will exceed $500 million in 2026 and rise again in 2027 to support aerospace and gas turbine capacity.
Plant maintained a 90% free-cash-flow conversion target and said Howmet expects to provide its first 2027 revenue outlook in November, with revenue anticipated to increase from 2026.
HWM Zacks Rank and Style Score Signals
HWM carries a Zacks Rank #2 (Buy), a favorable near-term rank in the Zacks framework. Its Growth Score of B is stronger than its Momentum Score of C, Value Score of F and VGM Score of D. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Style Scores complement the Zacks Rank, with A and B grades preferred for the relevant style. The current Zacks Rank can change as earnings estimates are revised following the just-reported results.
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Howmet Aerospace Inc. (HWM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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