Howmet Aerospace Stock Rises as Earnings Beat, Guidance Hike, Buyback Boost Sentiment

Howmet Aerospace Inc. (NYSE:HWM) shares traded higher Thursday after the company reported third-quarter 2026 results that topped Wall Street expectations and raised its full-year outlook.

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Adjusted EPS of $1.46 beat the $1.37 estimate, while sales of $2.703 billion topped the $2.591 billion estimate.

Revenue rose 29% year over year, including 25% organic growth, while GAAP diluted EPS increased 49% to $1.42.

Margins Expand As Aerospace, Gas Turbines Drive Growth

Adjusted EBITDA increased 43% to $879 million, and adjusted EBITDA margin expanded 310 basis points to 32.5%.

Operating income rose 43% to $777 million, with operating margin improving to 28.7%.

Revenue growth included gas turbines, up 45%, commercial aerospace, up 32%, commercial transportation, up 28%, and defense aerospace, up 10%.

Engine Products revenue increased 33% to $1.451 billion, while adjusted EBITDA rose 57% to $567 million and margin expanded to 39.1%.

Fastening Systems revenue climbed 41% to $630 million, including contributions from the CAM and Brunner acquisitions, while adjusted EBITDA margin fell to 29.4%.

Engineered Structures revenue fell 4% to $295 million, mainly due to the Savannah disk forging facility divestiture, while adjusted EBITDA margin rose to 23.7%.

Forged Wheels revenue rose 32% to $327 million, with adjusted EBITDA margin declining to 26.3% due to higher aluminum cost pass-through.

Cash Flow Supports Buybacks, Dividend Growth

Howmet paid down $60 million of commercial paper, and net debt-to-LTM EBITDA improved to 1.3 times. Total debt stood at about $4.44 billion at quarter-end.

Cash provided from operations totaled $709 million, while free cash flow was $562 million after $147 million of capital expenditures. Cash and cash equivalents totaled $507 million as of Sept. 30.

The company repurchased $500 million of stock during the quarter and $1.1 billion year to date.

Its board also increased the share repurchase authorization by $5 billion to $5.397 billion, while the quarterly dividend rose 17% to $0.14 per share.

Q4 Outlook Tops Estimates, Full-Year Guidance Raised

For the fourth quarter, Howmet expects adjusted EPS of $1.49-$1.51 versus a $1.42 estimate and sales of $2.740 billion-$2.760 billion versus $2.672 billion.

The company raised full-year 2026 adjusted EPS guidance to $5.49-$5.51 from $5.23-$5.31, above the $5.33 estimate, and lifted sales guidance to $10.290 billion-$10.310 billion from $10 billion-$10.100 billion, versus a $10.108 billion estimate.

Management Points To Continued Aerospace and Gas Turbine Demand

Management said the commercial aerospace market remains supported by aircraft backlogs and expected production increases through 2027 and beyond, while gas turbine customers are seeking higher volumes.

On the conference call, a Howmet executive said the company expects healthy volume increases for Boeing 737 and 787 aircraft and Airbus A320 and A350 programs, while F-35 fighter jet spares demand remains healthy as the aircraft fleet expands, according to Benzinga Pro.

Howmet also said it does not expect the Middle East conflict to affect spares demand materially.

HWM Price Action: Howmet Aerospace shares were up 6.18% at $207.38 at the time of publication on Thursday, according to Benzinga Pro data.

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