Howmet Aerospace Inc.

HWM · NYSE · USD

Analysis

Last 4 earnings calls · through Q2 FY2026

Howmet's growth now comes from two places: jet engine spares and the gas turbine blades that power data centers. Management has raised the full-year outlook at every call this year, while the plants and people behind that growth are paid for years before the parts ship. Which of those two engines of growth is growing faster for HWM right now?

  • Spares, not new aircraft, became the engine of growth.

    Engine aftermarket parts accelerated all year, and spares now make up about a fifth of revenue against a tenth in 2019. That revenue repeats every time an engine flies, so it does not wait on aircraft makers hitting their build rates. How much of HWM's spares growth is legacy engines versus new ones?

  • Gas turbines for data centers became a second growth engine.

    Management expects the gas turbine business to double within three to five years, and has now agreed plans with all seven major customers. Howmet makes most of the world's turbine blades, so growth depends on how fast it can build. How much gas turbine capacity does HWM have coming online in 2027?

  • The spending arrives years before the sales it pays for.

    Capital spending climbed to over $500 million this year from $453 million, with more planned for 2027, while the gas turbine contracts signed this year ship no parts until 2028. Staff for those plants cost money before they make parts.

Bullish
  • Gas turbine growth beyond aerospace
    The bull case rests on gas turbines becoming a second large growth business beside jet engines, with investment backed by customer contracts and aerospace-like returns.
  • Spares outgrow new-build sales
    Engine spares are growing faster than new-build sales, which lifts margins because aftermarket parts do not require the same new plant and equipment.
  • Guidance raised twice this year
    Management has raised its full-year revenue, profit and cash guidance at each of the last two quarterly updates, which bulls read as demand running ahead of plan.
Bearish
  • Capacity takes years to add
    The bear case argues growth is limited by how fast casting plants can be built and staffed, so strong demand does not become revenue for several years.
  • Cost of adding capacity
    New plants and more than a thousand new employees a year weigh on margins before they help, and management keeps raising the amount it will spend.
  • Airline traffic dependence
    Aircraft builds and engine spares depend on airlines filling seats, so a slowdown in travel or freight would cut demand for both new parts and repairs.
See the full bull & bear case
PoliticiansInstitutionsInsiders
PoliticianTransactionAmountTradedFiled
Donald Trump
Republican · Executive
Purchase≥$15KJun 23Aug 22
Donald Trump
Republican · Executive
Sale≥$15KMay 5Jul 1
Donald Trump
Republican · Executive
Purchase≥$1KMar 23May 13
Byron Donalds
Republican · House · FL-19
Sale≥$1KAug 11Sep 15
Alan Armstrong
Republican · Senate · OK
Purchase≥$1KMar 27Jul 21

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Product segmentsGeography
FY2025 · USD

How Howmet Aerospace turned $8.3B of revenue into $2.0B of operating income.

Revenue
Engine Products$4.3B▲ 15.66% YoY
Fastening Systems$1.7B▲ 10.72% YoY
Engineered Structures$1.1B▲ 7.79% YoY
Forged Wheels$1.0B▼ 1.42% YoY
Total revenue$8.3B
Gross profit$2.8B34.2%
Operating income$2.0B24.8%
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