Financial Data and Key Metrics Changes - Revenue for the second quarter increased by 9% year over year, reaching $2,530,000,000, exceeding the high end of guidance [6][12] - EBITDA margins improved to 28.7%, up 300 basis points year over year, with EBITDA at $589,000,000 [7][12] - Earnings per share (EPS) rose by 36% year over year to $0.91 [8][12] - Free cash flow was strong at $344,000,000, enabling share repurchases and debt repayment [7][14] Business Segment Data and Key Metrics Changes - Engine products revenue increased by 13% to $1,056,000,000, with an EBITDA margin of 33% [17][18] - Forged Wheels segment maintained a strong EBITDA margin of 27.5%, despite a volume decline of 11% [8][22] - Fastening Systems revenue grew by 9% to $431,000,000, with an EBITDA margin of 29.2% [19] - Engineered Structures revenue increased by 5% to $290,000,000, with a significant EBITDA margin increase to 21.4% [20][21] Market Data and Key Metrics Changes - Commercial aerospace revenue grew by 8%, driven by demand for engine spares [10] - Defense aerospace revenue reached a record $352,000,000, up 21% [10] - Industrial and other markets saw a 17% increase, with oil and gas up 26% and IGT up 25% [11] - Commercial transportation revenue declined by 4% due to higher aluminum costs [10] Company Strategy and Development Direction - The company is focused on expanding capacity for turbine airfoils and IGT build-out during 2026 and 2027 [6] - Continued investment in capital expenditures, with approximately $220,000,000 invested in the first half of the year, primarily in the engines business [14] - The company anticipates strong growth in commercial aerospace and defense aerospace, with a cautious outlook on the commercial truck segment [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in free cash flow and announced a 20% increase in the quarterly dividend [7][17] - The company expects continued strength in commercial aerospace and defense markets, with a slight offset in commercial transportation [28] - Management highlighted the importance of maintaining healthy inventory levels and navigating potential destocking risks [99] Other Important Information - The company is reviewing new U.S. tax legislation related to R&D and CapEx expensing, expecting a modest free cash flow benefit in 2025 [22][23] - The company has a strong liquidity position with a cash balance of $546,000,000 and an undrawn revolver of $1,000,000,000 [15] Q&A Session Summary Question: Can you comment on the rationalization of products within structures? - Management indicated that most rationalization has already occurred, leading to improved margins and healthy revenue growth [34][36] Question: What is the timing of revenue contributions from engine expansions? - Management expects outputs from new plants to begin in the fourth quarter of the year, with significant contributions anticipated in 2026 and 2027 [46][48] Question: How does the defense business, particularly F-35, contribute to future growth? - Management noted that the spares business for F-35 is expected to exceed original equipment production, indicating strong future contributions [56][58] Question: What are the assumptions for production rates of key aircraft models? - Management provided updated assumptions for production rates, including an increase for the Boeing 737 MAX from 28 to 33 per month [65] Question: What is the outlook for pricing expectations next year? - Management expects consistent pricing increases, similar to previous years, as they renew long-term agreements [120] Question: Are there any concerns regarding inventory levels and destocking? - Management acknowledged the potential for destocking but emphasized that their underlying growth remains strong despite these challenges [98][100]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 increased by 9% year over year, reaching $2,530,000,000, exceeding guidance [5][11] - EBITDA margins improved to 28.7%, up 300 basis points year over year, with EBITDA at $589,000,000 [6][12] - Earnings per share (EPS) rose by 36% year over year to $0.91 [7][12] - Free cash flow was strong at $344,000,000, enabling share repurchases and debt repayment [6][12] Business Segment Data and Key Metrics Changes - Engine products revenue increased by 13% to $1,056,000,000, with EBITDA margin rising to 33% [17] - Fastening systems revenue grew by 9% to $431,000,000, with EBITDA margin at 29.2% [19] - Engineered structures revenue increased by 5% to $290,000,000, with EBITDA margin at 21.4% [20] - Forged wheels revenue decreased slightly, but EBITDA margin remained strong at 27.5% [21] Market Data and Key Metrics Changes - Commercial aerospace revenue grew by 8%, driven by demand for engine spares [9] - Defense aerospace revenue reached a record $352,000,000, up 21% [9] - Industrial and other markets saw a 17% increase, with oil and gas up 26% and IGT up 25% [10] - Commercial transportation revenue declined by 4% due to higher aluminum costs [9] Company Strategy and Development Direction - The company is focused on expanding capacity for turbine airfoils and IGT, with significant capital expenditures planned [5][13] - Continued investment in engine business is expected to drive future growth, particularly in commercial aerospace and IGT [13][30] - The company anticipates strong demand in commercial aerospace and defense sectors, with a cautious outlook on commercial transportation [24][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth in commercial aerospace and defense markets, supported by high backlogs and increasing production rates [24][25] - The company expects to maintain EBITDA margins above 28% and has raised full-year guidance for revenue and free cash flow [29][30] - Management remains vigilant regarding potential risks in the commercial truck market and ongoing inventory destocking in aerospace [81][96] Other Important Information - The company announced a 20% increase in quarterly dividends to $0.12 per share starting in August [6][12] - The balance sheet remains strong with a cash balance of $546,000,000 and a net debt to trailing EBITDA ratio of 1.3 times [14][12] Q&A Session Summary Question: Comments on product rationalization within structures - Management indicated that most rationalization has already occurred, leading to improved margins and healthy revenue growth [32][33] Question: Expectations for margins in structures for the second half - Management expects to maintain current margin levels, with a goal of EBITDA above 28% [34] Question: Update on engine expansions and profitability - Management detailed ongoing construction of new plants, with expected outputs in 2026 and 2027, and anticipates improved profitability as training costs decrease [43][47] Question: Contribution of F-35 in defense revenue - Management noted strong contributions from the F-35 program, with expectations for continued growth in spares business [53][55] Question: Inventory levels and destocking risks - Management acknowledged some destocking in the aerospace sector but indicated that overall growth remains positive [96] Question: Pricing expectations for the coming years - Management expects consistent pricing increases in line with previous years, maintaining a disciplined approach to long-term agreements [115] Question: Industrial policy and forging assets - Management confirmed the importance of their forging assets and indicated potential discussions with the DoD regarding upgrades [120] Question: Monitoring supply chain bottlenecks - Management highlighted the importance of engine production rates for narrow-body aircraft and the need for increased supply to meet demand [126]

Financial Performance Highlights - Q2 2025 revenue reached $2.053 billion, a 9% increase year-over-year (YoY), driven by an 8% increase in Commercial Aerospace and a 21% increase in Defense Aerospace[7, 15, 17] - Adjusted EBITDA for Q2 2025 was $589 million, up 22% YoY, with an Adjusted EBITDA Margin of 28.7%, an increase of approximately 300 basis points[7, 19] - Adjusted Earnings Per Share (EPS) for Q2 2025 was $0.91, a 36% increase YoY[7, 17] - The company reported a record Q2 Free Cash Flow of $344 million, with an ending cash balance of $546 million[10, 19] - For Q2 Year-to-Date (YTD) 2025, revenue was $3.995 billion, an 8% increase YoY, and Adjusted EBITDA was $1.149 billion, a 25% increase YoY[11] Balance Sheet and Capital Deployment - Net Debt-to-Last Twelve Months (LTM) EBITDA improved to a record low of 1.3x[10, 19] - The company repurchased $175 million of common stock in Q2 at an average price of approximately $142 per share and an additional $100 million in July at approximately $183 per share[10, 20] - The company paid down $76 million in debt, resulting in annualized interest expense savings of approximately $4 million[10, 19] - The quarterly common stock dividend was increased by 20% quarter-over-quarter (QoQ) to $0.12 per share for Q3 2025[10, 20] Guidance - The company expects full-year (FY) 2025 revenue to increase by approximately 9% YoY, Adjusted EBITDA to increase by approximately 21% YoY, and Adjusted EPS to increase by approximately 34% YoY[29, 30] - The company anticipates FY 2025 Free Cash Flow to be approximately $1.225 billion, a 25% increase YoY, with a Free Cash Flow Conversion of approximately 85% or higher[29, 30]

Core Insights - Howmet (HWM) reported quarterly earnings of $0.91 per share, exceeding the Zacks Consensus Estimate of $0.87 per share, and up from $0.67 per share a year ago [1] - The company achieved a revenue of $2.05 billion for the quarter, surpassing the Zacks Consensus Estimate by 3.24%, compared to $1.88 billion in the same quarter last year [3] Earnings Performance - The earnings surprise for the quarter was +4.60%, following a previous surprise of +11.69% when earnings were $0.86 per share against an expectation of $0.77 [2] - Howmet has consistently surpassed consensus EPS estimates over the last four quarters [2] Stock Performance - Howmet shares have increased approximately 75.7% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.2% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.88 on revenues of $2.04 billion, and for the current fiscal year, it is $3.47 on revenues of $8.08 billion [8] - The outlook for the Aerospace - Defense industry, where Howmet operates, is favorable, ranking in the top 26% of over 250 Zacks industries [9]

[Financial Performance and Outlook](index=1&type=section&id=Financial%20Performance%20and%20Outlook) This section details Howmet Aerospace's strong Q2 2025 financial results, strategic insights, segment performance, and updated full-year guidance [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Howmet Aerospace achieved record Q2 2025 results with $2.05 billion revenue, 9% YoY growth, and significant profit margin expansion Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | $2.05B | $1.88B | +9% | | Net Income | $407M | $266M | +53% | | Earnings Per Share (Diluted) | $1.00 | $0.65 | +54% | | Adjusted EBITDA* | $589M | $483M | +22% | | Adjusted EBITDA Margin* | 28.7% | 25.7% | +300 bps | | Adjusted EPS* | $0.91 | $0.67 | +36% | | Free Cash Flow | $344M | N/A | N/A | *Excluding special items - Revenue growth was driven by strong performance across key markets: Commercial Aerospace (**+8%**), Defense Aerospace (**+21%**), and Industrial and Other (**+17%**), which was partially offset by a **4%** decline in the Commercial Transportation market[5](index=5&type=chunk) - The company generated **$446 million** in cash from operations and **$344 million** in free cash flow, marking the ninth consecutive quarter of positive free cash flow generation[3](index=3&type=chunk)[9](index=9&type=chunk) [Management Commentary and Strategic Actions](index=2&type=section&id=Management%20Commentary%20and%20Strategic%20Actions) Management highlighted strong Q2 performance, capital returns, and debt reduction, raising full-year guidance based on positive market outlook - The Board of Directors declared a **20% increase** in the quarterly common stock dividend to **$0.12 per share** for Q3 2025[9](index=9&type=chunk)[18](index=18&type=chunk) - The company repurchased **$175 million** of common stock in Q2 2025 and an additional **$100 million** in July, bringing year-to-date repurchases to **$400 million**[9](index=9&type=chunk)[10](index=10&type=chunk)[17](index=17&type=chunk) - Paid down **$76 million** of the USD Term Loan in Q2 2025, reducing annualized interest expense by approximately **$4 million**[9](index=9&type=chunk)[19](index=19&type=chunk) - Management sees a healthy outlook driven by robust demand in commercial aerospace (engine spares, new aircraft), defense aerospace, and industrial gas turbines for data centers, while the commercial transportation market remains weak[11](index=11&type=chunk) [Business Segment Performance](index=3&type=section&id=Second%20Quarter%202025%20Segment%20Performance) All segments contributed to strong performance, with Engine Products leading growth and margin expansion, while Forged Wheels improved margins despite flat revenue [Engine Products](index=3&type=section&id=Engine%20Products) Engine Products revenue grew 13% to $1.1 billion, with Adjusted EBITDA up 20% and margin expanding to 33.0% driven by aerospace and industrial markets Engine Products Q2 2025 Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $1.1B | +13% | | Segment Adjusted EBITDA | $349M | +20% | | Segment Adjusted EBITDA Margin | 33.0% | +170 bps | [Fastening Systems](index=3&type=section&id=Fastening%20Systems) Fastening Systems revenue increased 9% to $431 million, with Adjusted EBITDA up 25% and margin expanding to 29.2% due to aerospace growth and productivity Fastening Systems Q2 2025 Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $431M | +9% | | Segment Adjusted EBITDA | $126M | +25% | | Segment Adjusted EBITDA Margin | 29.2% | +360 bps | [Engineered Structures](index=4&type=section&id=Engineered%20Structures) Engineered Structures revenue grew 5% to $290 million, with Adjusted EBITDA surging 55% to $62 million and margin expanding to 21.4% driven by defense aerospace Engineered Structures Q2 2025 Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $290M | +5% | | Segment Adjusted EBITDA | $62M | +55% | | Segment Adjusted EBITDA Margin | 21.4% | +690 bps | [Forged Wheels](index=4&type=section&id=Forged%20Wheels) Forged Wheels revenue decreased 1% to $276 million, but Adjusted EBITDA increased 1% to $76 million, with margin improving to 27.5% due to cost reductions Forged Wheels Q2 2025 Performance | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Revenue | $276M | -1% | | Segment Adjusted EBITDA | $76M | +1% | | Segment Adjusted EBITDA Margin | 27.5% | +50 bps | [Full Year 2025 Guidance](index=1&type=section&id=2025%20Guidance) Howmet Aerospace raised its full-year 2025 guidance for revenue, Adjusted EBITDA, Adjusted EPS, and Free Cash Flow, reflecting strong performance and positive outlook Updated Full Year 2025 Guidance (Baseline) | Metric | New FY 2025 Guidance (Baseline) | Change from Prior Guidance | | :--- | :--- | :--- | | Revenue | $8.130B | +$100M | | Adj. EBITDA | $2.320B | +$70M | | Adj. EBITDA Margin | 28.5% | +50 bps | | Adj. Earnings per Share | $3.60 | +$0.20 | | Free Cash Flow | $1.225B | +$75M | Q3 2025 Guidance (Baseline) | Metric | Q3 2025 Guidance (Baseline) | | :--- | :--- | | Revenue | $2.030B | | Adj. EBITDA | $580M | | Adj. EBITDA Margin | 28.6% | | Adj. Earnings per Share | $0.90 | [Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Consolidated%20Financial%20Statements%20%28unaudited%29) This section presents Howmet Aerospace's unaudited consolidated statements of operations, balance sheet, and cash flows for the reported periods [Statement of Consolidated Operations](index=8&type=section&id=Statement%20of%20Consolidated%20Operations%20%28unaudited%29) The unaudited statement of operations shows Q2 2025 sales of $2.053 billion, operating income of $521 million, and net income of $407 million Q2 2025 Statement of Operations Highlights (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Sales | $2,053 | $1,880 | | Operating income | $521 | $398 | | Income before income taxes | $469 | $334 | | Net income | $407 | $266 | | Diluted EPS | $1.00 | $0.65 | [Consolidated Balance Sheet](index=9&type=section&id=Consolidated%20Balance%20Sheet%20%28unaudited%29) As of June 30, 2025, the balance sheet shows total assets of $11.046 billion, total liabilities of $6.004 billion, and total equity of $5.042 billion Balance Sheet Highlights (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $545 | $564 | | Total current assets | $3,694 | $3,362 | | Total assets | $11,046 | $10,519 | | Long-term debt | $3,253 | $3,309 | | Total liabilities | $6,004 | $5,965 | | Total equity | $5,042 | $4,554 | [Statement of Consolidated Cash Flows](index=10&type=section&id=Statement%20of%20Consolidated%20Cash%20Flows%20%28unaudited%29) For the six months ended June 30, 2025, cash from operations was $699 million, with $506 million used in financing and $212 million in investing activities Cash Flow Highlights - Six Months Ended June 30 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Cash provided from operations | $699 | $574 | | Cash used for financing activities | ($506) | ($301) | | - Repurchases of common stock | ($300) | ($210) | | Cash used for investing activities | ($212) | ($129) | | - Capital expenditures | ($221) | ($137) | | Net change in cash | ($19) | $142 | [Non-GAAP Financial Measures and Reconciliations](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section provides reconciliations of non-GAAP financial measures, including Adjusted EBITDA, Free Cash Flow, Operational Tax Rate, and Adjusted Operating Income, to their GAAP equivalents [Reconciliation of Net Income and Adjusted EBITDA](index=12&type=section&id=Reconciliation%20of%20Net%20Income%20and%20Adjusted%20EBITDA) This section reconciles Q2 2025 GAAP Net Income to Adjusted Net Income and GAAP Operating Income to Adjusted EBITDA, detailing adjustments for special items Q2 2025 Reconciliation of Net Income to Adjusted Net Income (in millions) | Line Item | Amount | | :--- | :--- | | Net income (GAAP) | $407 | | After-tax special items | ($36) | | **Net income excluding Special items (Non-GAAP)** | **$371** | Q2 2025 Reconciliation to Adjusted EBITDA (in millions) | Line Item | Amount | | :--- | :--- | | Operating income (GAAP) | $521 | | Add: Depreciation & Amortization | $69 | | Add: Corporate Expense | $25 | | **Total Segment Adjusted EBITDA** | **$613** | | Less: Special Items | ($1) | | **Adjusted EBITDA excluding Special items (Non-GAAP)** | **$589** | [Reconciliation of Free Cash Flow](index=13&type=section&id=Reconciliation%20of%20Free%20cash%20flow) This section details the calculation of Free Cash Flow for Q2 2025, derived by subtracting capital expenditures from cash provided by operations Q2 2025 Free Cash Flow Calculation (in millions) | Line Item | Amount | | :--- | :--- | | Cash provided from operations | $446 | | Capital expenditures | ($102) | | **Free cash flow (Non-GAAP)** | **$344** | [Reconciliation of Operational Tax Rate](index=15&type=section&id=Reconciliation%20of%20Operational%20tax%20rate) This section reconciles the GAAP effective tax rate to the non-GAAP Operational Tax Rate for Q2 2025, adjusting for special tax items Q2 2025 Tax Rate Reconciliation | Metric | Rate | | :--- | :--- | | Effective tax rate, as reported (GAAP) | 13.2% | | **Operational tax rate, as adjusted (Non-GAAP)** | **20.7%** | - Tax special items for Q2 2025 included benefits from U.S. accounting method changes (**$17M**), excess benefit for stock compensation (**$13M**), and R&D credits (**$5M**)[43](index=43&type=chunk) [Reconciliation of Adjusted Operating Income](index=17&type=section&id=Reconciliation%20of%20Adjusted%20Operating%20Income%20Excluding%20Special%20Items) This section reconciles GAAP Operating Income to Adjusted Operating Income for Q2 2025, detailing adjustments for special items and margin improvement Q2 2025 Adjusted Operating Income Reconciliation (in millions) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating income (GAAP) | $521 | $398 | | Add/Subtract: Special Items | ($1) | $16 | | **Adjusted operating income (Non-GAAP)** | **$520** | **$414** | | **Adjusted operating income margin (Non-GAAP)** | **25.3%** | **22.0%** |

Core Insights - Howmet Aerospace reported record revenue of $2.05 billion for the second quarter of 2025, representing a 9% increase year over year, driven by growth in the commercial aerospace market (8%), defense aerospace market (21%), and industrial and other markets (17%) [3][4][8] - The company achieved a net income of $407 million, or $1.00 per share, compared to $266 million, or $0.65 per share, in the same quarter of 2024, with adjusted earnings per share of $0.91, up 36% year over year [4][8] - Operating income increased by 31% year over year to $521 million, with an operating income margin of 25.4%, up approximately 420 basis points [5][8] - Adjusted EBITDA for the quarter was $589 million, a 22% increase year over year, with an adjusted EBITDA margin of 28.7%, up 300 basis points [6][8] - The company generated $344 million in free cash flow, marking the ninth consecutive quarter of positive free cash flow generation [7][8] Financial Performance - Revenue for the second quarter of 2025 was $2.05 billion, up 9% year over year, with significant contributions from various markets [3][8] - Net income was reported at $407 million, an increase from $266 million in the previous year, with adjusted net income excluding special items at $371 million [4][8] - Operating income reached $521 million, reflecting a 31% year-over-year increase, with a margin of 25.4% [5][8] - Adjusted EBITDA was $589 million, a 22% increase year over year, with a margin of 28.7% [6][8] Shareholder Returns and Debt Management - The company repurchased $175 million of common stock in the second quarter of 2025 and an additional $100 million in July, totaling $400 million year-to-date [9][16] - A quarterly dividend of $0.12 per share was declared, representing a 20% increase from the previous dividend [10][17] - Howmet Aerospace paid down $76 million of its USD Term Loan, reducing annualized interest expense by approximately $4 million [10][18] Guidance and Market Outlook - Full year 2025 guidance was raised on all metrics following strong second quarter performance [10][19] - The commercial aerospace market is expected to continue growing, supported by healthy passenger traffic and high OEM backlogs [10][19] - The defense aerospace market remains strong, and demand for industrial gas turbines is anticipated to stay robust [10][19]

Core Points - Howmet Aerospace Inc. declared a dividend of 12 cents per share on its Common Stock, payable on August 25, 2025, to shareholders of record as of August 8, 2025 [1] - The company also declared a dividend of 93.75 cents per share on its $3.75 Cumulative Preferred Stock, payable on October 1, 2025, to shareholders of record as of September 12, 2025 [1] Company Overview - Howmet Aerospace Inc. is a leading global provider of advanced engineered solutions for the aerospace and transportation industries, headquartered in Pittsburgh, Pennsylvania [2] - The company's primary businesses focus on jet engine components, aerospace fastening systems, and airframe structural components, which are essential for mission-critical performance and efficiency in aerospace and defense applications [2] - Howmet Aerospace also produces forged aluminum wheels for commercial transportation and holds approximately 1,170 granted and pending patents, enabling lighter and more fuel-efficient aircraft and commercial trucks with a lower carbon footprint [2]

Core Viewpoint - Howmet Aerospace Inc. is expected to report strong second-quarter results, with earnings projected at $0.87 per share and revenues at $1.99 billion, reflecting year-over-year increases of 29.9% and 5.8% respectively [2][7]. Financial Performance - The Zacks Consensus Estimate for second-quarter earnings has increased by a penny over the past 60 days, indicating positive momentum [2]. - The earnings surprise history shows that Howmet has outperformed the Zacks Consensus Estimate in the last four quarters, with an average surprise of 8.8% [3]. Market Dynamics - The commercial aerospace market is experiencing solid momentum, driven by increased air travel and demand for wide-body aircraft, which supports OEM spending [5]. - The revenue estimate from the commercial aerospace market for the second quarter is $1.05 billion, representing a 6.9% increase from the previous year [6]. - The defense business remains strong, with robust orders for engine spares for the F-35 program, leading to a projected revenue of $343 million, an 18.3% increase year-over-year [8]. Challenges - The Forged Wheels segment is facing lower demand due to reduced OEM builds, with a revenue estimate of $305 million, indicating an 11.8% decrease year-over-year [9]. - Supply-chain disruptions in the aerospace sector have resulted in delays and increased costs, which may impact operations and performance [10]. Stock Performance - Howmet's stock has surged 37.4% over the past three months, outperforming the Zacks Aerospace-Defense industry growth of 20.2% and the S&P 500's increase of 15% [11]. - The company's forward 12-month P/E ratio stands at 48.79X, significantly higher than the industry average of 28.11X, which may pose risks if market sentiment declines [14]. Investment Outlook - Howmet's diversified portfolio and strength in aerospace markets position it well for long-term growth, supported by enhanced U.S. government budgetary provisions [17]. - However, near-term challenges such as weakness in the commercial transportation market and supply-chain issues warrant caution for investors [18].

Company Overview - Howmet (HWM) is expected to report a year-over-year increase in earnings, with a projected EPS of $0.87, reflecting a +29.9% change, and revenues of $1.99 billion, up 5.8% from the previous year [3][11] Earnings Expectations - The consensus EPS estimate has been revised 1.1% higher in the last 30 days, indicating a positive reassessment by analysts [4] - The upcoming earnings report is anticipated to be released on July 31, and the stock may react positively if actual results exceed expectations [2][11] Earnings Surprise Prediction - Howmet's Earnings ESP is -0.14%, suggesting a bearish outlook from analysts, which complicates the prediction of an earnings beat [11] - The company holds a Zacks Rank of 3, indicating a hold position, which further adds uncertainty to the earnings prediction [11] Historical Performance - In the last reported quarter, Howmet exceeded EPS expectations by +11.69%, with actual earnings of $0.86 compared to an expected $0.77 [12] - Over the past four quarters, Howmet has successfully beaten consensus EPS estimates each time [13] Industry Context - In the Zacks Aerospace - Defense industry, Boeing (BA) is expected to report a loss of $1.47 per share, with a year-over-year change of +49.3%, and revenues projected at $21.86 billion, up 29.6% [17][18] - Boeing's consensus EPS estimate has been revised 1.7% lower, and it also holds a Zacks Rank of 3, indicating similar uncertainty regarding its earnings performance [18][19]

Group 1: Company Performance - Howmet Aerospace Inc. (HWM) is experiencing a decline in its commercial transportation market, with revenues falling 14% year-over-year in Q1 2025, primarily due to weaker OEM builds, especially in the Forged Wheels segment [1][7] - Production issues related to Boeing's 787 aircraft are causing quality control challenges, which are expected to negatively impact both narrow-body and wide-body aircraft production rates, potentially reducing demand for maintenance parts and products [2] - Despite challenges in the commercial transportation market, strong demand in the commercial and defense aerospace markets, particularly for F-35 engine spares and aerospace fastening systems, is supporting HWM's overall performance [3][7] Group 2: Industry Context - Textron Inc.'s Aviation segment is showing growth, with a 2% increase in revenues year-over-year to $1.21 billion in Q1 2025, supported by improving commercial air passenger traffic [4] - GE Aerospace is benefiting from solid demand for its engines and services, with a significant deal with Qatar Airways for over 400 GE9X and GEnx engines, marking the largest widebody engine deal in the company's history [5] Group 3: Valuation and Estimates - HWM's shares have surged 130.4% over the past year, significantly outperforming the industry's growth of 17.2% [6] - The company is currently trading at a forward price-to-earnings ratio of 47.53X, which is above the industry average of 27.95X, and carries a Value Score of D [9] - The Zacks Consensus Estimate for HWM's earnings has been increasing over the past 60 days, with current estimates for Q2 2025 at $0.87 and for the current year at $3.47 [11][12]