HWM · Howmet Aerospace Inc.

Howmet Aerospace delivered exceptional Q1 2026 results, with revenue surging 19% year-over-year to $2.31 billion, propelled by robust 20% growth in commercial aerospace, 10% in defense aerospace, and 39% in gas turbines markets. Engine Products led with 29% revenue growth to $1.25 billion and 400bps margin expansion to 36.6%, absorbing 235 net headcount for future demand. Fastening Systems grew 14% to $471 million with 100bps margin improvement, while Engineered Structures dipped 3% due to product rationalization but held steady EBITDA. Forged Wheels offset 11% volume decline in commercial transportation via cost pass-through and reductions, lifting margins 350bps to 30.5%. Adjusted EBITDA rose 32% to $740 million with 320bps margin expansion to 32.0%, reflecting operational leverage. CEO John Plant highlighted exceeding guidance across key metrics and outstanding $359 million free cash flow after $94 million capex, enabling $300 million stock repurchases. Portfolio actions included completing $1.8 billion CAM acquisition on April 6 adding to Fastening Systems, $120 million Brunner deal on February 6 for larger fasteners, and $230 million Savannah divestiture on March 31 yielding $93 million gain. Financing comprised $1.25 billion notes and commercial paper. Updated FY2026 guidance reflects $275 million net revenue add from transactions, raising revenue to $9.575-9.725 billion (+$550 million baseline), adjusted EBITDA to $3.025-3.095 billion (+$300 million, +140bps margin), and EPS to $4.88-5.00 (+$0.49), with EPS accretion in 2027. Q2 guidance sets revenue at $2.390-2.410 billion. Strong backlogs, production ramps, and defense/gas turbine activity underpin outlook, tempered by Iranian conflict risks and transportation caution. Fitch upgraded to A-.