Howmet reported a strong Q2 with significant organic growth, led by commercial aerospace and gas turbines. Management raised full-year 2026 guidance across revenue, EPS, and FCF, and pre-announced 2027 revenue growth. Organic growth of 21% in Q2, boosting full-year revenue guidance to $10.05 billion.
Howmet reported a strong Q2 with significant organic growth, led by commercial aerospace and gas turbines. Management raised full-year 2026 guidance across revenue, EPS, and FCF, and pre-announced 2027 revenue growth. Organic growth of 21% in Q2, boosting full-year revenue guidance to $10.05 billion.
Commercial aerospace demand is strong with robust build rates and increasing backlogs. Gas turbine demand is called 'extraordinary' with customers revisiting and adding to demand outlooks. Defense spares and missiles show increasing demand signals, but formal orders are pending.
Management raised 2026 CapEx to over $500 million, noting the need to further increase it in 2027 for gas turbines and aerospace. They are building new plants (e.g., a new aerospace plant, expansions in Japan, Europe, Virginia) to support growth.
Gas turbine demand 'extraordinary' with new capacity in Japan already fully spoken for; customer demand outlooks being revisited upward.
Commercial aerospace demand is strong with robust build rates and increasing backlogs. Gas turbine demand is called 'extraordinary' with customers revisiting and adding to demand outlooks. Defense spares and missiles show increasing demand signals, but formal orders are pending.
The phrase 'AI demand' or 'data centers' appears in the context of gas turbine demand for electricity generation from natural gas for data centers, with management noting 'extraordinary' demand and customers already wanting to revisit and add to demand outlooks. No direct AI product or monetization discussion was present.
Commercial aerospace demand is strong with robust build rates and increasing backlogs. Gas turbine demand is called 'extraordinary' with customers revisiting and adding to demand outlooks. Defense spares and missiles show increasing demand signals, but formal orders are pending.
Management raised 2026 CapEx to over $500 million, noting the need to further increase it in 2027 for gas turbines and aerospace. They are building new plants (e.g., a new aerospace plant, expansions in Japan, Europe, Virginia) to support growth.
John Plant repeatedly highlighted growth across all markets, raised guidance, and expressed confidence in future capacity and synergies, despite geopolitical and economic turbulence.
Capacity constraints may limit near-term revenue growth and require higher capex, but they also support pricing power and long-term contracts.
“We have one on casting pit left but I think that capacity is going to be gone. So we have a progressive build out of what we've already committed by way of significant investments.”
“that new plant that I visited in April is going to be, it's already essentially fully spoken for. We have one on casting pit left but I think that capacity is going to be gone.”
“Both of us are expecting to see a significant increase in spares demand coming from that, and I think we'll see it on aircraft from F-18s, F-22s, F-35s, etc., plus the parts we supply to some of the stealth bombers”
“I expect we'll do the same as we did on the Leap 1A and have a few hundred engine sets ready in either our or our customers' inventory such that the cutover... will be in a good supply situation for that cutover.”
| Показатель | Период | Диапазон | Середина | Статус |
|---|---|---|---|---|
| Capex | FY2026 | $0.5B | $0.5B | RAISED |
| EPS | FY2026 | $5.23–$5.31above к консенсусу | $5.27 | RAISED |
| EPS | FY2026 Q3 | $1.34–$1.36 | $1.35 | MAINTAINED |
| Free cash flow | FY2026 | $1.85B–$1.95Binline к консенсусу | $1.9B | RAISED |
| Revenue | FY2026 | $10B–$10.1Babove к консенсусу | $10.05B | RAISED |
| Revenue | FY2026 Q3 | $2.74B–$2.76B | $2.75B | MAINTAINED |
| Дата прогноза | Показатель | Целевой период | Прогноз | Факт | Результат |
|---|---|---|---|---|---|
| FY2026 Q1 | Revenue | FY2026 Q2 | $2.39B–$2.41B | $2.547B | Met / beat |
| FY2025 Q4 | EPS | FY2026 Q1 | $1.09–$1.11 | $1.22 | Met / beat |
| FY2025 Q4 | Revenue | FY2026 Q1 | $2.225B–$2.245B | $2.313B | Met / beat |
Discrete defense spares orders from the recent Middle East conflict have not yet materialized, but management expects a significant bubble of demand in 2027 from high utilization of F-18s, F-22s, and F-35s. — A lagged surge in defense spares demand is likely, boosting RTX and ultimately flowing through to Howmet's defense segment throughout 2027.
“we've started the GTFA for Pratt & Whitney, there's a very large increase to be achieved in the second half of this year and even larger into and through 2027.”
Thank you.
So, first of all, we still have some of the machines that we have installed coming up to full rate. And we've also been building out the employee base that is necessary to go along with that build-out across all the shifts. and from the existing major capacity expansions we signal there's still some equipment still to flow in during the second half of 2026. But it's not like one and done, Seth. It's going to be additional equipment that we have to install from what we've already committed to and contracted either with external machine tool manufacturers or if not our own, for example in building of our own testing machines that we do and we have a very active program of doing that over the next I'll say two or three years both for commercial aerospace and the IGT market. and when we're looking at it right now, we do need to make further investments beyond what we have today to be able to achieve the stated rates that our customers will want as we go forward. The only question we have is what's the total size of the narrow body market, total size of the wide body market and then add them together because for us it's less a question of is it this aircraft platform or that aircraft platform but it's the aggregate of all of them put together plus in addition to that the spares demand and as you've seen spares growth has also been very substantial and we expect that to continue to be positive because we've still got the Transition for the Leap 1B and then some, I'll say, retrofit on that, plus, say, while we've started the GTFA for Pratt & Whitney, there's a very large increase to be achieved in the second half of this year and even larger into and through 2027. Great. Thanks very much.
Howmet sees Boeing's 787 rate increases as durable demand growth, supporting Howmet's wide-body engine and fastener content. The plans for further expansion in South Carolina signal continued volume upside beyond the near-term rate 10 target.
“there are demand increases signaled at both Boeing for the 787 up to rate 10 until their South Carolina plant is further expanded.”
Thank you. Thank you.
Okay, so first of all, by way of capacity, essentially... The majority of our manufacturing equipment, that equipment does not know whether it's building parts for a narrow-body aircraft or a wide-body aircraft. So it'll have, I'll say, similar custom machines, similar transfer presses, and going through similar I'll say continuously moving heat treatment furnaces or kilns and so For us, it's more a question of the overall market rather than wide body per se. We do feel as though wide body will increase over the next, I'll say, couple of years. And, you know, there are demand increases signaled at both Boeing for the 787 up to rate 10 until their South Carolina plant is further expanded. and then maybe opportunities to go significantly higher after that expansion and then also Airbus which probably struggled on the A350 over the last two or three years and now seem to be entering a period where there's some confidence that their let's say rate five or six will move to Thank you for watching. Thank you very much. and so we are poised with additional plastics we've already prepared and I think I just referenced a new plant that we committed to last week, a major expansion and building out of one of the sites we have to create the opportunity for that further expansion. It's going to be required.
Howmet is anticipating a modest step-up in Airbus A350 production rates, which would increase demand for its wide-body engine parts and fasteners.
“Airbus which probably struggled on the A350 over the last two or three years and now seem to be entering a period where there's some confidence that their let's say rate five or six will move to”
Thank you. Thank you.
Okay, so first of all, by way of capacity, essentially... The majority of our manufacturing equipment, that equipment does not know whether it's building parts for a narrow-body aircraft or a wide-body aircraft. So it'll have, I'll say, similar custom machines, similar transfer presses, and going through similar I'll say continuously moving heat treatment furnaces or kilns and so For us, it's more a question of the overall market rather than wide body per se. We do feel as though wide body will increase over the next, I'll say, couple of years. And, you know, there are demand increases signaled at both Boeing for the 787 up to rate 10 until their South Carolina plant is further expanded. and then maybe opportunities to go significantly higher after that expansion and then also Airbus which probably struggled on the A350 over the last two or three years and now seem to be entering a period where there's some confidence that their let's say rate five or six will move to Thank you for watching. Thank you very much. and so we are poised with additional plastics we've already prepared and I think I just referenced a new plant that we committed to last week, a major expansion and building out of one of the sites we have to create the opportunity for that further expansion. It's going to be required.
Howmet's new IGT gas turbine casting capacity in Japan is already fully spoken for, with the company citing demand from new applications and technology introductions that will help it expand its >50% global market share. — Indicates that IGT OEMs (GE Vernova, Siemens Energy) are effectively locked in with Howmet for additional capacity, and pricing/supply will remain tight, supporting Howmet's long-term growth and margins.
Good morning. Thank you. Just, John, continuing on the ITT path here, as you've talked about, the demand is extraordinary. And, you know, you've talked about, you know, a number, six or seven new agreements that you've signed. And what... I'm trying to understand here is how quickly can one respond to demand in terms of sort of signing a deal and then actually delivering products on that? And I say it because your reference to SpaceX, I mean, this week they talked about adding at least 15 gigawatts of terrestrial capacity over the next 18 months. I mean, is it possible? to respond to this kind of growth since you're the leading player on Blades?
So I'll start with 2026, Doug, and our, let's say, 30... Thank you for joining us. Investment in IGT, which was notable because we've not really talked about it before. And then what we've talked about in 2025, especially given the consequences of the new administration and their fossil fuel focus, then we do have the benefit of some of that capacity coming on stream. So witness the delivery of our first new large casting machine into Japan and another one is going to follow in the second half. and in fact that new plant that I visited in April is going to be, it's already essentially fully spoken for. We have one on casting pit left but I think that capacity is going to be gone. So we have a progressive build out of what we've already committed by way of significant investments. But for the new, I will say, gigawatts of capacity coming on, Then really we're looking at 2028, 2029 and even the more recent ones, you know, 29 into 2030. So what I expect is that we will see growth throughout the next four or five years. and we've installed some of that already. Some of it's already logged to come in in 27 but with another major step into 28 and 29. I suspect that we may not have finished yet because I said earlier we are seeing some of the demand patterns revisited and so I think there's more at play to come. which we haven't built into our future plans yet because until it's more certain then we'll just hold off on that and be clear. So it's not A single item which equals capacity index. But if we started now, you can assume that it's a brand new commitment. It's August of 26. You can say it's earliest August of 28 if you just say, okay, what's the next piece of machine equipment that we could build or we can get from our machine tool suppliers? and we've had to book capacity at some of those on the expectation of some of this coming through just to make sure we can be responsive to our customers.
Management is now confident they will see a step-up in the LEAP-1B blade cutover to the new technology blade, with a major ramp in the second half of 2026 and a likely transition to full production in Q1 2027.