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SEC filingStrong quarter driven by broad-based aerospace and gas turbine demand, with revenue up 19% and operating income surging 52% on favorable pricing and volume growth.
Howmet Aerospace delivered a standout quarter, with revenue rising 19% year-over-year to $2.3 billion. The growth was driven by robust demand across commercial aerospace, defense aerospace, and gas turbines markets, including engine spares. Favorable product pricing also contributed, while lower volumes in the commercial transportation market provided a partial offset. The company's exposure to the aerospace cycle, particularly through its Engine Products segment, positions it well to capture ongoing production rate increases from OEMs and aftermarket demand.
Operating income increased 52% to $753 million, with operating margin expanding to 32.6%. The improvement was primarily due to favorable product pricing and volume growth, partially offset by cost pass-through and increased net headcount, mainly in the Engine Products segment, in support of expected revenue increases. This margin expansion reflects the company's pricing power and operating leverage in a favorable demand environment.
Net cash provided by operating activities increased to $453 million from $253 million in the prior year, driven by higher earnings. Capital expenditures decreased to $94 million from $119 million, resulting in free cash flow of $359 million. The company expects capital expenditures to remain elevated as it invests in capacity expansions to support aerospace and gas turbines market growth. Management believes its cash on hand, revolving credit facilities, commercial paper program, and accounts receivables securitization program will be sufficient to fund operating and capital allocation activities.
The Engineered Structures segment continues to focus on optimizing its manufacturing footprint and rationalizing product mix to maximize profitability. This includes the recent sale of its disk forging facility in Savannah, Georgia. The company remains committed to disciplined capital allocation and operational efficiency.