Howmet Aerospace Reports 46% EPS Growth as Gas Turbine and Aerospace Demand Surges
The aerospace components manufacturer posted 24% revenue growth in Q2 2026, driven by commercial aerospace strength and extraordinary demand from data center power requirements.
Strong Quarter Across All Segments
Howmet Aerospace Inc. delivered robust second-quarter results, with revenue climbing 24% year-over-year while earnings per share jumped 46% to $1.33 (earnings call, 2026-08-06). The company reported organic growth of 21% for the quarter and 20% for the first half, excluding the impact of recent acquisitions.
EBITDA margin expanded 340 basis points to 32.1% despite headwinds from the recently acquired CAM Fastener business, which the company completed on April 6 for approximately $1.8 billion (earnings call, 2026-08-06). CEO John Plant noted that "2027 is the focus year for our CAM optimization plan to begin to drive noticeable synergies."
Gas Turbine Business Sees Extraordinary Growth
A standout performer was the gas turbine segment, which posted 38% revenue growth driven by increased electricity generation demand, particularly for data centers. CFO Patrick Winterlich emphasized that "gas turbine growth is driven by the increased demand for electricity generation, especially from natural gas for data centers" (earnings call, 2026-08-06).
Plant revealed that the company "completed negotiations with the last of our 7 major customers," though noted that "some customers already wanting to revisit and add to their demand outlooks" (earnings call, 2026-08-06). The segment is further supported by new gas turbine blade applications and technology introductions that should help Howmet outgrow its current market share.
Aerospace Momentum Continues
Commercial aerospace revenue grew 28%, with organic growth of 26%, reflecting strong demand for both new aircraft builds and spare parts. Defense aerospace posted solid 11% growth with 7% organic expansion, driven by spares activity and higher legacy fighter demand.
Spares revenue across commercial aerospace, defense aerospace, and gas turbines surged 37% to approximately $560 million, now representing roughly 22% of total revenue through the first half of 2026—higher than historical levels (earnings call, 2026-08-06).
The Engine Products segment delivered particularly strong performance, with revenue increasing 32% to $1.37 billion and EBITDA margin expanding 470 basis points to 37.7%, even while absorbing approximately 485 net new employees during the quarter (earnings call, 2026-08-06).
Capital Deployment and Outlook
Howmet generated free cash flow of $479 million in the second quarter and approximately $840 million for the first half. The company repurchased $300 million in shares during Q2 and an additional $200 million in July, bringing year-to-date buybacks to $800 million at an average price of $248 per share (earnings call, 2026-08-06).
The company also announced a 17% dividend increase from $0.12 to $0.14 per share quarterly.
Capital expenditure requirements continue to increase, with the company now expecting to exceed $500 million in capital spend for 2026 and signaling further increases in 2027 to support organic growth (earnings call, 2026-08-06).
For the third quarter, Howmet guided to revenue of $2.75 billion (plus or minus $10 million), EBITDA of $830 million (plus or minus $5 million), and earnings per share of $1.35 (plus or minus $0.01). Full-year guidance was increased, though specific numbers were not provided in the excerpt.
This article was generated by MarginX from the earnings call on 2026-08-06. It is not investment advice.