tapebrief
HWM · Q4 2025

HWM · Q1 2026 Earnings

Bullish

Howmet Aerospace

Reported May 7, 2026

30-second summary

Howmet printed Q1 FY2026 revenue of $2.313B (+19% YoY, +6.7% QoQ), non-GAAP EPS of $1.22, and adjusted EBITDA margin of 32.0% — beating its own Q1 guide by $68M on revenue (high end; $88M above low end), $0.11 on EPS (high end; $0.13 above low end), and 130bps on margin (high end; 140bps above low end). Management raised every FY2026 line item: revenue to $9.575–9.725B (mid +$550M, ~6% above prior mid), EPS to $4.88–5.00 (mid +$0.49), EBITDA to $3.025–3.095B (mid +$300M, +10.9%), FCF to $1.70–1.80B (mid +$150M), and organic revenue growth from ~10% to 14%. Gas turbines (+39% YoY) and engine spares (+48% YoY) are now the dominant tailwinds underwriting the raise, with Engine Products at 36.6% segment EBITDA margin despite ongoing labor absorption.

Headline numbers

EPS

Q1 FY2026

$1.22

Revenue

Q1 FY2026

$2.31B

+19.0% YoY

Free cash flow

Q1 FY2026

$0.36B

Operating margin

Q1 FY2026

32.6%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$2.31B+19.0%$2.17B+6.7%
EPS$1.22—$1.05+16.2%
Operating margin32.6%—22.6%+1000bps
Free cash flow$0.36B—$0.53B-32.3%

Guidance

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ1 FY2026$2.225B to $2.245B$2.313B+$0.068B to $0.088B above guideBeat
Adjusted EPSQ1 FY2026$1.09 to $1.11$1.22+$0.11 to $0.13 above guideBeat
Adjusted EBITDAQ1 FY2026$680M to $690M$740M+$50M to $60M above guideBeat
Adjusted EBITDA MarginQ1 FY202630.6% to 30.7%32.0%+130 to 140 bps above guideBeat

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Revenue
FY 2026
$9.000B to $9.200B$9.575B to $9.725B+$0.375B to $0.525B at midpointRaised
Adjusted EPS
FY 2026
$4.35 to $4.55$4.88 to $5.00+$0.53 to $0.65 (midpoint +$0.49)Raised
Adjusted EBITDA
FY 2026
$2.710B to $2.810B$3.025B to $3.095B+$0.315B to $0.385B (midpoint +$0.300B)Raised
Adjusted EBITDA Margin
FY 2026
30.1% to 30.5%31.6% to 31.8%+110 to 170 bps (midpoint +140 bps)Raised
Free Cash Flow
FY 2026
$1.550B to $1.650B$1.700B to $1.800B+$0.050B to $0.250B (midpoint +$0.150B)Raised
Organic Revenue Growth
FY 2026
Approximately 10%14%+400 bpsRaised

Segment KPIs

Q1 FY2026
SegmentQ1 FY2026YoY
Engine Products$1.253B+29.0%
Fastening Systems$0.471B+14.0%
Engineered Structures$0.294B-3.0%
Forged Wheels$0.295B+17.0%
Engine Products Adjusted EBITDA Margin36.6%—

Other KPIs

Q1 FY2026
SegmentQ1 FY2026
Adjusted EBITDA$740 million
Adjusted EBITDA Margin32.0%
Adjusted Operating Income$666 million
Adjusted Operating Income Margin28.8%
Commercial Aerospace Revenue Growth20%
Defense Aerospace Revenue Growth10%
Gas Turbines Revenue Growth39%

Management tone

The four-year organic growth anchor stepped from ~10% to 14% in just two months since the February guide. Per the prepared statement: "our four-year revenue growth guide excluding the impact of M&A, rises from 10% to 14%." This is the most consequential disclosure of the print: management is telling shareholders that underlying end-market demand has structurally re-rated since February, before any contribution from the $1.8B CAM acquisition or the Savannah divestiture. The +400bps revision in eight weeks is unusual for an industrials franchise that historically tightens, not widens, its anchors.

Gas turbine customer commercial coverage stepped up materially in prepared remarks. Per Plant: "we've now reached agreement with six of seven major customers and with one more to go, which is a very significant customer to hopefully complete during the balance of the second quarter." This is up from four major customer agreements disclosed on the last earnings call — a step-up of two locked agreements in a single quarter, consistent with the +39% YoY revenue growth rate the segment is already running. Plant also flagged that new Japan plant casting furnaces are "ready by the July, August timeframe and starting to have their first production by the fourth quarter," pinning gas turbine capacity relief to a specific quarter.

The spares-as-cyclical framing has been formally retired in favor of spares-as-structural. Engine spares grew +48% YoY in Q1 FY2026 and management now expects the 23% spares-of-revenue mix to sustain through FY2026 and potentially expand further. Through FY2025 management framed spares as a tailwind that would eventually fade as OE rates normalize; this quarter the framing inverts — spares are the structural floor under Engine Products margins, which is what is letting the segment print 36.6% EBITDA margin against ~235 net new heads absorbed in Q1 FY2026 alone.

Macro caveats have been preserved but functionally disconnected from forward action. Press-release language acknowledges "the increased uncertainties around the macroeconomic outlook" and flags Iran/geopolitical risk to commercial aircraft supply chains — yet every guide line moved up, the CAM acquisition closed, and capex was raised. This is management hedging on risk language while taking offsetting capital actions: a tone posture more characteristic of late-cycle confidence than early-cycle caution.

Recurring themes management leaned on this quarter:

Commercial aerospace production rate increases throughout 2026 with sustained spares tailwindGas turbine demand acceleration driven by hyperscaler AI/data center investment and energy securityPortfolio optimization toward higher-margin, higher-growth fastener and engine businessesCapacity expansion and yield improvement as near-term production enablers before major capex comes onlineStrong free cash flow enabling simultaneous capex increase, M&A, buybacks, and dividend growthGeopolitical supply chain hedging (rare earths, materials sourcing) to secure defense/aerospace customers

Risks management surfaced:

Iran situation and potential geopolitical disruption to commercial aircraft supply and spares demandMacroeconomic uncertainty, inflation trajectory, and global interest rate/currency volatilityCommercial transportation market weakness persisting despite recent strength; diesel price impactsAircraft production rate increases lagging OEM guidance; execution risk on 737, 787, A320, A350 ratesCapacity constraints in gas turbines through H1 2026 limiting revenue upside; dependence on yield improvements

Answers to last quarter's watch list

Q1 FY2026 commercial transportation print — The "quarterly low point" framing largely held on a volume basis. Forged Wheels reported revenue +17% YoY in Q1 FY2026, but volumes were down 11% with the headline carried by aluminum/tariff pass-through and FX. Management's press release cites "signs of demand improvement in commercial transportation" but kept its cautious posture; John Plant noted in prepared remarks that the commercial truck market began to strengthen starting in Q2 FY2026. Status: Confirmed
Engineered Structures recovery or fade — Resolved negatively. The segment went from +14% YoY (Q3 FY2025) → flat (Q4 FY2025) → -3% (Q1 FY2026), confirming that the Q3 FY2025 step was a one-quarter F-35 destock-end mix benefit rather than a new wide-body-driven run-rate. This is the only segment in contraction.
Resolved negatively
Engine Products margin against the labor drag — Resolved positively, and decisively. Segment EBITDA margin printed 36.6% in Q1 FY2026 vs. the 34.4% Q4 FY2025 mark — a +220bps QoQ expansion (+400bps YoY) despite absorbing ~235 net new hires in the quarter. The spares mix (+48% YoY engine spares, 23% of total revenue) is more than offsetting the labor absorption drag at the EBITDA line.
Resolved positively
CAM closing and contribution — The press release confirms CAM closed April 6, 2026 (~$1.8B) and the Savannah divestiture ($230M, closed March 31) is complete. Management quantified the net portfolio effect at +$275M revenue and +$60M EBITDA for the remainder of FY2026, with EPS impact described as insignificant due to interest expense and accretion expected in FY2027. Management's organic growth reframe explicitly excludes M&A impact. Status: Resolved
Fourth large gas turbine OE agreement — Stepped up materially. In prepared remarks, Plant disclosed six of seven major customer agreements now finalized, up from four last quarter, with the seventh expected to close during Q2 FY2026. Gas turbine revenue +39% YoY (record growth rate) is consistent with continued progress on the $1B → $2B doubling.
Resolved positively
FY2026 EPS guide refinement — Tightened and stepped up materially: $4.35–4.55 (range $0.20) → $4.88–5.00 (range $0.12). Midpoint moved +$0.49 (+11.0%) and the range narrowed by $0.08, signaling management has both conviction in the higher number and tighter visibility on the bands.
Resolved positively

What to watch into next quarter

Engineered Structures inflection or further fade: Now down -3% YoY, the segment is the only contraction in the portfolio. Watch whether Q2 FY2026 returns to positive territory (signaling wide-body 787/A350 rates are firming) or extends the decline (signaling structural mix loss as F-35 normalizes). A second consecutive negative print would force a rethink of the FY2026 guide composition.

Engine Products margin against continued hiring: 36.6% is a new high; >1,000 net new heads company-wide still to be absorbed through FY2026. Watch whether margin holds above 35% as the hiring cost catches up, or compresses toward the 33–34% range. The spares mix at 23% is the offset to track.

Gas turbine capacity timing: Management committed to "back end of the year" capacity relief from the Japan furnaces (first production Q4 FY2026). Watch Q2 and Q3 FY2026 for any slippage on that timeline — gas turbine growth at +39% YoY is currently constrained by yield, not demand.

CAM first quarter of contribution disclosure: Q2 FY2026 should be the first clean quarter with CAM in the run-rate. Watch for explicit revenue, EBITDA margin, and accretion figures against the +$275M revenue / +$60M EBITDA full-portfolio framing management provided.

Q2 FY2026 print vs. the $2.39–2.41B guide: Howmet has now beaten its own quarterly guide by $50M+ for four consecutive quarters. Watch whether the Q2 FY2026 print extends the streak or whether the higher base (Q2 FY2025 $2.05B + 17% implied) begins to compress the beat magnitude.

2027 commentary: Management has explicitly deferred a forward-year anchor, with Plant noting in prepared remarks that "the trajectory going into 2027 is yet to be determined" in the context of commercial aircraft build rates. Watch whether the Q2 or Q3 FY2026 print introduces a 2027 anchor — given the +400bps organic growth revision this quarter, an early 2027 commitment would be the next bullish escalator.

Sources

  1. Howmet Aerospace Q1 FY2026 earnings press release (SEC Form 8-K Exhibit 99.1), filed 2026-05-07. https://www.sec.gov/Archives/edgar/data/4281/000110465926056645/tm2613779d1_ex99-1.htm
  2. Howmet Aerospace Q1 FY2026 earnings call prepared remarks (John Plant, Patrick Winterlich), May 7, 2026.
  3. Howmet Aerospace Q4 FY2025 earnings press release (prior-quarter baseline for FY2026 guidance comparison), filed 2026-02-12.
  4. Howmet Aerospace Q2 FY2025 earnings press release (prior-year Q2 baseline for YoY math), filed 2025-07-31.

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