Howmet Aerospace — Third Quarter 2026 Earnings Summary

Financial Performance:

• Third quarter 2026 revenue reached $2,703 million, a 29% increase year-over-year from $2,089 million, with organic growth of 25%.
• Nine months ended September 30, 2026 revenue was $7,563 million, up 24% year-over-year from $6,084 million.
• GAAP operating income for the quarter was $777 million (28.7% margin), up 43% year-over-year from $542 million (25.9% margin).
• Nine months GAAP operating income was $2,241 million (29.6% margin), up 44% year-over-year from $1,557 million (25.6% margin).
• GAAP earnings per share (EPS) were $1.42 for the quarter, up 49% year-over-year from $0.95; nine months EPS were $4.18, up 50% year-over-year from $2.79.
• Adjusted EBITDA for the quarter was $879 million, up 43% year-over-year from $614 million, with a margin of 32.5% (up 310 basis points).
• Nine months Adjusted EBITDA was $2,436 million, up 38% year-over-year from $1,763 million, with a margin of 32.2% (up 320 basis points).
• Adjusted EPS was $1.46 for the quarter, up 54% year-over-year from $0.95; nine months Adjusted EPS was $4.01, up 47% year-over-year from $2.72.
• Cash from operations was $709 million for the quarter, up 34% year-over-year from $531 million; nine months cash from operations was $1,745 million, up 42% year-over-year from $1,230 million.
• Free cash flow was $562 million for the quarter, up 33% year-over-year from $423 million; nine months free cash flow was $1,400 million, up 55% year-over-year from $901 million.
• Capital expenditures were $147 million in the quarter and $345 million for the nine months.
• Deferred revenue was $204 million as of September 30, 2026, up from $147 million as of December 31, 2025.
• Short-term borrowings were $390 million as of September 30, 2026, compared to $0 at the end of 2025.
• Long-term debt was $4,052 million as of September 30, 2026, up from $2,859 million at the end of 2025.

Guidance and Future Outlook:

• Full year 2026 revenue guidance increased to a baseline of $10,300 million (range $10,290–$10,310 million), representing a $250 million increase from prior guidance.
• Full year 2026 Adjusted EBITDA guidance increased to a baseline of $3,330 million (range $3,325–$3,335 million), up $100 million with a 20 basis point margin increase.
• Full year 2026 Adjusted EPS guidance increased to a baseline of $5.50 (range $5.49–$5.51), up $0.23.
• Full year 2026 Free Cash Flow guidance increased to a baseline of $2,000 million (range $1,950–$2,050 million), up $100 million.
• Fourth quarter 2026 revenue guidance is $2,750 million (range $2,740–$2,760 million).
• Fourth quarter 2026 Adjusted EBITDA guidance is $900 million (range $895–$905 million) with a margin of 32.7%–32.8%.
• Fourth quarter 2026 Adjusted EPS guidance is $1.50 (range $1.49–$1.51).
• Full year 2027 revenue guidance is approximately $11.5 billion, representing approximately 12% growth year-over-year.
• Management anticipates elevated capital expenditure spend beyond 2027 to support growth in aerospace, defense, and gas turbines.

Business Segments and Product Lines:

• Engine Products: Revenue was $1,451 million, up 33% year-over-year, driven by commercial aerospace and gas turbines markets. Adjusted EBITDA was $567 million, up 57% year-over-year, with a margin of 39.1% (up 580 basis points).
• Fastening Systems: Revenue was $630 million, up 41% year-over-year (10% organic growth excluding acquisitions). Adjusted EBITDA was $185 million, up 34% year-over-year, with a margin of 29.4% (down 140 basis points due to CAM acquisition impact).
• Engineered Structures: Revenue was $295 million, down 4% year-over-year (8% growth excluding the Savannah disk forging facility divestiture). Adjusted EBITDA was $70 million, up 9% year-over-year, with a margin of 23.7% (up 290 basis points).
• Forged Wheels: Revenue was $327 million, up 32% year-over-year, driven by commercial transportation volumes and aluminum cost pass-through. Adjusted EBITDA was $86 million, up 18% year-over-year, with a margin of 26.3% (down 330 basis points due to aluminum cost pass-through).
• Gas turbines revenue grew 45% year-over-year, demonstrating increased market share and output.
• Commercial aerospace revenue grew 32% year-over-year.
• Defense aerospace revenue grew 10% year-over-year.
• Commercial transportation revenue grew 28% year-over-year.
• The Company absorbed approximately 520 net headcount in the Engine Products segment to support future revenue increases.

Market and Competitive Landscape:

• The commercial aerospace market is robust, supported by an extraordinary aircraft order backlog driving production volume increases through 2027 and beyond.
• Defense markets remain solid with increased spares needs and likely increases in legacy fighter builds.
• The Middle East conflict is not expected to materially impact spares demand due to existing engine shop visit backlogs and requirements for next-generation narrowbody engines.
• Gas turbines market demand continues to strengthen with customers increasing volumes beyond previous expectations, supporting the outlook beyond 2028.
• The commercial transportation market continues to experience recovery in North America.

Risks and Challenges:

• Forward-looking statements are subject to risks including deterioration in global economic conditions, unfavorable changes in markets served, and impacts from tariffs, trade policies, and energy costs.
• Risks include potential cyber attacks, loss of significant customers, manufacturing difficulties, supply chain disruptions, and inability to attract/retain qualified workforce.
• Risks include failure to achieve anticipated financial performance, inability to meet increased demand, competition from new products, and geopolitical/regulatory risks.
• Specific risks include the inability to realize expected benefits from acquisitions (CAM and Brunner), failure to comply with government contracting regulations, and adverse changes in pension asset returns.

Management Commentary and Tone:

• Executive Chairman and CEO John Plant stated performance was "solid in all dimensions," with third quarter results exceeding the high end of guidance.
• Management described the third quarter revenue growth of 29% as the "strongest quarterly growth rate on record."
• Management expressed confidence in the Company's strong free cash flow outlook, citing the $500 million in stock repurchases supported by robust free cash flow.
• Management noted a "healthy fourth quarter" and the conclusion of "another strong year."
• Management emphasized a "disciplined focus on free cash flow conversion" throughout the elevated investment period.

Other Key Points:

• The Company repurchased $500 million of common stock in the third quarter 2026 at an average price of $264.77 per share, retiring approximately 1.9 million shares.
• Year-to-date share repurchases totaled $1.1 billion at an average price of $250.72 per share.
• On October 28, 2026, the Board of Directors authorized an increase in the share repurchase program by $5 billion, resulting in a total authorization of $5.397 billion.
• The quarterly common stock dividend was increased by 17% to $0.14 per share.
• The Company paid down $60 million of borrowings on its commercial paper program; $390 million remained outstanding against a $1 billion program.
• Acquisitions included CAM (acquired April 2026) and Brunner (acquired February 2026).
• The Company divested the Savannah disk forging facility in March 2026.
• Goodwill increased to $5,098 million as of September 30, 2026, from $4,022 million at the end of 2025.
• Intangibles increased to $855 million as of September 30, 2026, from $457 million at the end of 2025.
• The Accounts Receivable Securitization program remains unchanged at $250 million outstanding.