Howmet Aerospace Q2 2025 slides: Record revenue and margins as aerospace demand soars

Howmet Aerospace Inc . (NYSE:HWM) reported record financial results in its second quarter 2025 earnings presentation on July 31, showcasing strong growth across key metrics and raising its full-year guidance. The company’s stock responded positively, trading up 3.05% to $198 in premarket activity following the announcement.

Quarterly Performance Highlights

Howmet delivered record Q2 2025 revenue of $2.053 billion, up 9% year-over-year, driven primarily by strong performance in its aerospace segments. Adjusted EBITDA reached $589 million, increasing 22% compared to the same period last year, while adjusted EBITDA margin expanded 300 basis points to 28.7%.

As shown in the following summary of key financial metrics:

Adjusted earnings per share rose to $0.91, representing a 36% year-over-year increase from $0.67 in Q2 2024. This continues the company’s strong momentum from Q1 2025, when it reported EPS of $0.86, exceeding analyst expectations.

The company generated record Q2 free cash flow of $344 million and ended the quarter with a cash balance of $546 million. This robust cash generation supported $175 million in share repurchases during the quarter at an average price of approximately $142 per share, with an additional $100 million repurchased in July at an average price of about $183 per share.

Segment Analysis

Howmet’s performance was driven by strong results across most of its business segments, with particularly robust growth in aerospace markets.

Revenue by market segment shows the company’s diversification, with Commercial Aerospace representing 52% of total revenue, followed by Commercial Transportation (17%), Defense Aerospace (16%), and Industrial & Other (15%):

The Engine Products segment, Howmet’s largest business unit, delivered particularly strong results with revenue of $1.056 billion, up 13% year-over-year. This segment achieved an adjusted EBITDA margin of 33.0%, benefiting from commercial and defense aerospace growth as well as increased spares activity across all markets.

As illustrated in the Engine Products performance chart:

The Fastening Systems segment also performed well, with revenue increasing 9% year-over-year to $431 million and an adjusted EBITDA margin of 29.2%. This growth was primarily driven by strength in commercial and defense aerospace markets, partially offset by weakness in commercial transportation.

The Engineered Structures segment reported revenue of $290 million, up 5% year-over-year, with an adjusted EBITDA margin of 21.4%. Growth in this segment was led by defense aerospace, which represents 31% of the segment’s revenue.

The Forged Wheels segment was the only business unit to report a revenue decline, with sales down 1% year-over-year to $276 million, reflecting weakness in the commercial transportation market. Despite the revenue decline, the segment maintained a strong adjusted EBITDA margin of 27.5%.

Capital Allocation & Balance Sheet

Howmet’s strong cash flow generation enabled significant capital returns to shareholders while simultaneously strengthening the balance sheet. The company paid down $76 million of debt during the quarter, resulting in annualized interest expense savings of approximately $4 million.

The company’s net debt-to-LTM EBITDA ratio improved to a record low of 1.3x, reflecting its strengthened financial position. All of Howmet’s long-term debt is unsecured and at fixed rates, providing stability in the current interest rate environment.

In addition to share repurchases, Howmet paid $41 million in dividends during the quarter and announced a 20% increase in its quarterly dividend to $0.12 per share for Q3 2025, doubling the dividend compared to the same period last year.

The following chart summarizes Howmet’s key performance metrics and capital allocation activities:

Forward Guidance

Based on its strong first-half performance, Howmet raised its full-year 2025 guidance. The company now expects:

For Q3 2025, Howmet projects revenue of approximately $2.030 billion and adjusted EBITDA of $580 million, with adjusted earnings per share of $0.90.

For the full year 2025, the company anticipates:

• Revenue of approximately $8.130 billion, up 9% compared to 2024
• Adjusted EBITDA of $2.320 billion, up 21% year-over-year
• Adjusted earnings per share of $3.60, up 34% year-over-year
• Free cash flow of $1.225 billion, up 25% year-over-year

The company also increased its capital expenditure guidance to $390 million (approximately 5% of revenue), up from previous guidance of $340-360 million, primarily to support capacity expansion in the Engine Products segment.

Strategic Positioning and Outlook

Howmet’s performance reflects its strong positioning in growing aerospace markets, with commercial aerospace revenue up 8% and defense aerospace revenue up 21% year-over-year. The company continues to benefit from increasing aircraft production rates and growing aftermarket demand.

The following comprehensive summary highlights Howmet’s Q2 2025 achievements and outlook:

While the commercial transportation market showed some weakness with revenue down 4% year-over-year, Howmet’s diversified portfolio and strong aerospace demand more than offset this challenge.

The company’s increased capital expenditure for Engine Products capacity expansion signals confidence in continued strong demand in aerospace markets. With a record low leverage ratio and robust free cash flow generation, Howmet is well-positioned to continue investing in growth opportunities while returning capital to shareholders through dividends and share repurchases.

Full presentation:

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