Howmet Aerospace Inc. HWM reported third-quarter 2026 adjusted earnings of $1.46 per share, up 54% year over year. The figure beat the Zacks Consensus Estimate of $1.37 by 6.6%.
Revenues of $2.70 billion increased 29% year over year and surpassed the consensus mark of $2.59 billion by 4.2%. Organic growth was 25%, supported by strong commercial aerospace, defense aerospace and gas turbine demand. Gas turbine revenues surged 45%, while commercial aerospace revenues increased 32%.
HWM's Aerospace and Gas Turbine Markets Drive Growth
Commercial aerospace revenues rose 32% year over year and represented 54% of total revenues. Growth reflected stronger demand for aircraft engine components and spare parts, supported by increasing aircraft production activity.
Gas turbine revenues advanced 45% and accounted for 13% of total revenues. Defense aerospace revenues increased 10%, while commercial transportation revenues rose 28%. Other-market revenues grew 48%. Management highlighted strengthening gas turbine demand and increasing customer volume requirements.
Howmet Aerospace's Engine Products Posts Strong Gains
Engine Products generated revenues of $1.45 billion, accounting for 53.7% of consolidated revenues. Segment revenues increased 33% year over year, driven by commercial aerospace and gas turbine demand, including higher demand for engine spare parts.
Segment adjusted EBITDA climbed 57% to $567 million. The adjusted EBITDA margin expanded 580 basis points to 39.1%. Howmet Aerospace added approximately 520 net employees in the segment during the quarter to support expected revenue growth.
HWM's Fastening Systems Benefits From Acquisitions
Fastening Systems revenues increased 41% year over year to $630 million, representing 23.3% of total revenues. Results benefited from commercial and defense aerospace growth as well as contributions from the CAM and Brunner acquisitions. Excluding acquisitions, revenues increased 10%.
Segment adjusted EBITDA rose 34% to $185 million. However, the adjusted EBITDA margin contracted 140 basis points to 29.4%, reflecting the impact of the CAM acquisition. The segment continued benefiting from stronger demand across its aerospace markets.
Howmet Aerospace's Other Segments Show Mixed Trends
Engineered Structures revenues declined 4% to $295 million, primarily due to the divestiture of the Savannah disk forging facility. Excluding the divestiture, organic revenues increased 8%. Segment adjusted EBITDA rose 9% to $70 million, while the margin expanded 290 basis points to 23.7%, benefiting from the exit of lower-margin business and product rationalization.
Forged Wheels revenues climbed 32% to $327 million, driven by higher commercial transportation volumes and increased aluminum cost pass-through. Segment adjusted EBITDA increased 18% to $86 million. However, the margin contracted 330 basis points to 26.3%, reflecting the impact of higher aluminum cost pass-through.
Howmet Aerospace Inc. Price, Consensus and EPS Surprise
Howmet Aerospace Inc. price-consensus-eps-surprise-chart | Howmet Aerospace Inc. Quote
HWM's Margin Expansion Supports Profitability
Adjusted EBITDA increased 43% year over year to $879 million. The adjusted EBITDA margin expanded 310 basis points to 32.5%, supported by growth across commercial aerospace, defense aerospace, gas turbines and commercial transportation markets.
Adjusted operating income rose 45% to $786 million. The adjusted operating margin improved 320 basis points to 29.1%. On a GAAP basis, operating income increased 43% to $777 million, while the operating margin expanded 280 basis points to 28.7%.
Howmet Aerospace's Cash Flow Backs Capital Deployment
Howmet Aerospace generated $709 million in cash from operations during the quarter, up 34% year over year. Capital expenditures were $147 million, resulting in free cash flow of $562 million, up 33% year over year. The company ended the quarter with a cash balance of $508 million.
The company repurchased $500 million of common stock during the quarter, bringing year-to-date repurchases to $1.1 billion. It also paid down $60 million of debt and increased its quarterly dividend 17% to 14 cents per share. On Oct. 28, the board authorized an additional $5 billion in share repurchases, raising the total authorization to approximately $5.4 billion.
HWM Raises 2026 Guidance
For the fourth quarter of 2026, HWM expects revenues of $2.74-$2.76 billion. Adjusted EBITDA is projected between $895 million and $905 million, while adjusted earnings are expected in the range of $1.49-$1.51 per share.
For 2026, Howmet Aerospace raised its revenue outlook to $10.29-$10.31 billion. Adjusted EBITDA is now anticipated between $3.325 billion and $3.335 billion, with adjusted earnings projected at $5.49-$5.51 per share. Free cash flow is expected in the range of $1.95-$2.05 billion.
The company also introduced its 2027 revenue outlook of approximately $11.5 billion, representing expected growth of about 12% year over year.
HWM’s Zacks Rank
The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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RTX Corporation’s RTX third-quarter 2026 adjusted earnings per share (EPS) of $2.26 beat the Zacks Consensus Estimate of $1.78 by 27%. The bottom line improved 32.9% from the year-ago quarter’s level of $1.70.
Revenues rose 11.1% year over year to $24.97 billion and beat the consensus mark of $24.01 billion by 4%. Growth was supported by higher commercial aftermarket and defense demand.
Northrop Grumman Corporation NOC reported third-quarter 2026 adjusted earnings of $7.89 per share, which beat the Zacks Consensus Estimate of $7.22 by 9.3%. The bottom line also increased 2.9% from the year-ago quarter’s level of $7.67.
NOC’s total sales of $11.12 billion in the third quarter beat the Zacks Consensus Estimate of $11.06 billion by 0.6%. The top line also improved 6.7% from $10.42 billion in the year-ago quarter.
Grupo Aeromexico, S.A.B. de C.V. AERO reported $1.62 billion in revenues in the third quarter of 2026, representing no change year over year. EPS was 28 cents compared with break-even earnings a year ago.
Reported revenues exceeded the Zacks Consensus Estimate of $1.61 billion by 0.62%. EPS missed the consensus mark of $0.29, delivering an average negative surprise of 3.45%.
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