Howmet Aerospace Inc. (NYSE:HWM) reported first-quarter results Thursday that topped analyst estimates and raised its full-year outlook, sending shares higher.
Revenue rose 19% year over year to $2.313 billion, beating the $2.241 billion analyst estimate. Adjusted EPS rose 42% to $1.22, ahead of the $1.11 estimate, while GAAP EPS increased 71% to $1.44.
The company said revenue, adjusted EBITDA, and adjusted EPS exceeded the high end of guidance.
Margins Expand On Aerospace Demand
Operating income increased 52% to $753 million, while operating margin expanded 720 basis points to 32.6%. Adjusted EBITDA rose 32% to $740 million, with margin improving 320 basis points to 32.0%.
Growth was driven by 20% higher commercial aerospace revenue, 10% growth in defense aerospace, and 39% growth in gas turbines.
CEO John Plant said, “Commercial aerospace OEM customers continue to target production rate increases supported by record backlogs. Engine spares needs continue to increase, although an effect could be felt from the Iranian conflict.”
“Defense markets remain healthy, while the gas turbines market is also very active. We see signs of demand improvement in commercial transportation, although we remain cautious.”
Segment Results And Capital Deployment
Engine Products revenue rose 29% to $1.25 billion, with adjusted EBITDA up 44% to $458 million. Fastening Systems revenue increased 14% to $471 million.
Engineered Structures revenue declined 3% to $294 million due to product rationalization, while Forged Wheels revenue rose 17% despite lower commercial transportation volumes.
Cash from operations increased 79% to $453 million, while free cash flow jumped 168% to $359 million.
The company ended the quarter with $2.435 billion in cash, and long-term debt was $4.05 billion
Howmet completed the approximately $1.8 billion acquisition of Consolidated Aerospace Manufacturing, sold its Savannah disk forging facility for about $230 million, and repurchased $300 million of stock during the quarter.
Outlook Raised Above Estimates
Howmet raised full-year 2026 adjusted EPS guidance to $4.88-$5.00 from $4.35-$4.55, above the $4.64 analyst estimate.
Revenue guidance was raised to $9.575 billion-$9.725 billion from $9.0 billion-$9.2 billion, above the $9.382 billion estimate. Second-quarter guidance for revenue and adjusted EPS also topped analyst expectations.
Howmet expects second-quarter adjusted earnings of $1.22 to $1.24 per share, above analysts’ estimates of $1.15 per share, and projects sales of $2.39 billion to $2.41 billion, compared with estimates of $2.338 billion.
HWM Price Action: Howmet Aerospace shares were up 8.37% at $277.89 at the time of publication on Thursday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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