Howmet's Q2 Earnings & Revenues Top Estimates, Increase Y/Y

Howmet Aerospace Inc.’s HWM second-quarter 2025 adjusted earnings of 91 cents per share beat the Zacks Consensus Estimate of 87 cents. The bottom line surged 36% year over year.

Total revenues of $2.05 billion beat the consensus estimate of $1.99 billion. The top line increased 9% from the year-ago quarter. The increase was backed by strength in the company’s commercial aerospace market.

Howmet’s Segmental Details

The Engine Products segment’s revenues totaled $1.06 billion, representing 51.6% of net revenues. On a year-over-year basis, the segment’s revenues increased 13%, driven by growth in the commercial aerospace, defense aerospace, industrial gas turbine, and oil and gas markets. The Zacks Consensus Estimate for Engine Products’ revenues was pegged at $1.04 billion.

The Fastening Systems segment generated revenues of $431 million, accounting for 21% of net revenues. Revenues increased 9% year over year, driven by growth in the commercial and defense aerospace markets, partially offset by softness in the commercial transportation market. The consensus estimate for Fastening Systems’ revenues was pegged at $420 million.

The Engineered Structures segment’s revenues, representing 14% of net revenues, increased 5% year over year to $290 million. The results benefited from growth in the defense aerospace market. The Zacks Consensus Estimate for Engineered Structures’ revenues was pegged at $291 million.

The Forged Wheels segment’s revenues totaled $276 million, representing 13.4% of net revenues. On a year-over-year basis, the segment’s revenues were down 1%, owing to 11% lower volumes in the commercial transportation market. This was mostly offset by higher aluminum cost pass-through. The consensus estimate for Forged Wheels’ revenues was pegged at $246 million.

Howmet Aerospace Inc. Price, Consensus and EPS Surprise

Howmet Aerospace Inc. price-consensus-eps-surprise-chart | Howmet Aerospace Inc. Quote

HWM’s Margin Profile

Howmet’s cost of goods sold rose 6.1% year over year to $1.37 billion. Selling, general, administrative and other expenses decreased 8.2% year over year to $89 million. Research and development expenses were $9 million.

Adjusted EBITDA, excluding special items, was $589 million, up 22% year over year. Adjusted EBITDA margin increased 300 basis points year over year to 28.7%. Adjusted operating income increased 25.6% year over year to $520 million.

The adjusted operating income margin was 25.3%, up 330 basis points year over year. Net interest expenses totaled $38 million, down 22% from the year-ago quarter.

Howmet’s Balance Sheet and Cash Flow

Exiting the second quarter, Howmet had cash and cash equivalents of $545 million compared with $564 million at the end of December 2024. Long-term debt was $3.25 billion compared with $3.31 billion at the end of fourth-quarter 2024.

In the first six months of 2025, Howmet generated net cash of $699 million from operating activities compared with $574 million in the year-ago period. Capital expenditures totaled $221 million compared with $137 million a year ago. Free cash flow in the same period was $478 million.

Howmet paid out dividends of $83 million in the first six months of 2025 compared with $42 million in the year-ago period. In the same period, it repurchased shares worth $400 million, which included an additional repurchase of $100 million in July 2025.

HWM’s Q3 Outlook

For the third quarter of 2025, Howmet expects revenues to be in the range of $2.02-$2.04 billion. Adjusted EBITDA is expected to be between $575 million and $585 million, while the adjusted EBITDA margin is anticipated to be in the range of 28.5-28.7%. Adjusted earnings per share (EPS) are estimated to be in the range of 89-91 cents.

Howmet’s 2025 Outlook

Howmet predicts revenues to be in the range of $8.08-$8.18 billion compared with $7.88-$8.18 billion projected earlier. Adjusted EBITDA is expected to be between $2.30 billion and $2.34 billion, while the adjusted EBITDA margin is projected to be between 28.5% and 28.6%.

Adjusted EPS is forecasted to be in the band of $3.56-$3.64. Free cash flow is expected to be in the range of $1.175-$1.275 billion.

Zacks Rank & Stocks to Consider

HWM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked companies are discussed below:

GE Aerospace GE currently sports a Zacks Rank of 1. GE surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 16.1%. In the past 60 days, the Zacks Consensus Estimate for GE Aerospace’s 2025 earnings has increased 6.5%.

Huntington Ingalls Industries HII presently carries a Zacks Rank #2 (Buy). HII’s earnings surpassed the consensus estimate twice and missed on the other two occasions in the trailing four quarters. The average earnings surprise was 4.2%. In the past 60 days, the Zacks Consensus Estimate for Huntington Ingalls’ 2025 earnings has increased 0.8%.

ITT Inc. ITT currently carries a Zacks Rank of 2. ITT has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, the average surprise being 1.7%.  In the past 60 days, the Zacks Consensus Estimate for ITT’s 2025 earnings has increased 0.9%.

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This article originally published on Zacks Investment Research (zacks.com).

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