The 5 Most Interesting Analyst Questions From Howmet's Q2 Earnings Call

Howmet’s second quarter results were driven by strong gains in both commercial and defense aerospace, as well as robust performance in the industrial gas turbine and oil and gas markets. Management attributed year-over-year revenue growth to increased demand for engine spares and new engine builds, with CEO John Plant noting, “Demand continues to be strong across all of our engines markets with record engine spares volume.” However, softness in commercial transportation and ongoing destocking in certain aerospace segments tempered overall results. The negative reaction from the market suggests investors remain concerned about the sustainability of these growth trends, especially given the mixed signals in end-market demand and inventory shifts.

Is now the time to buy HWM? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Howmet’s Q2 Earnings Call

• Myles Alexander Walton (Wolfe Research): Asked about the impact of product rationalization in Structures on margins. CEO John Plant stated most rationalization is complete and expects current margin levels to be sustained.
• Sheila Karin Kahyaoglu (Jefferies): Inquired about timing and profitability of new engine and IGT plants. Plant indicated initial output will begin in late 2025, with profitability improving as training and launch costs subside.
• Seth Michael Seifman (JPMorgan): Questioned the sustainability of F-35 contributions to defense. Plant responded that increasing spares demand and international expansion should support robust defense revenue through the decade.
• Douglas Stuart Harned (Bernstein): Asked about IGT growth and long-term agreements. Plant confirmed major contracts are in place, with significant revenue growth expected from 2026 as capacity comes online.
• Ken Herbert (RBC Capital Markets): Sought clarification on inventory destocking risk. Plant acknowledged ongoing destocking at customers but said Howmet’s growth in spares and defense has helped offset these headwinds.

Catalysts in Upcoming Quarters

In upcoming quarters, our team will focus on (1) the pace at which new engine and IGT capacity becomes operational and contributes to sales, (2) the sustainability of aerospace spares and defense momentum amid shifting production rates and supply chain constraints, and (3) any stabilization or further deterioration in commercial transportation volumes. Progress in automating production and realization of productivity gains from capital investments will also be key indicators for future profitability.

Howmet currently trades at $181, down from $192.31 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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