Howmet's Q4 Earnings & Revenues Surpass Estimates, Increase Y/Y

Core Insights - Howmet Aerospace Inc. reported fourth-quarter 2025 adjusted earnings of $1.05 per share, exceeding the Zacks Consensus Estimate of 97 cents, with a year-over-year increase of 42% [1][10] - Total revenues reached $2.17 billion, surpassing the consensus estimate of $2.14 billion, marking a 3.8% increase from the previous year, driven by strength in the commercial aerospace market [1][10] Segment Performance - The Engine Products segment generated revenues of $1.16 billion, accounting for 53.5% of total revenues, with a 20% year-over-year increase, supported by growth in commercial aerospace, defense aerospace, and industrial gas turbine markets [2] - The Fastening Systems segment reported revenues of $454 million, representing 20.7% of total revenues, with a 13% year-over-year increase, primarily due to growth in the commercial aerospace market, though partially offset by weakness in commercial transportation [3] - The Engineered Structures segment's revenues increased 4% year-over-year to $287 million, representing 13.4% of total revenues, benefiting from growth in the defense aerospace market [4] - The Forged Wheels segment generated revenues of $264 million, accounting for 12% of total revenues, with a 9% year-over-year increase, driven by higher aluminum cost pass-through, despite a 10% decline in volumes in the commercial transportation market [5] Financial Metrics - Cost of goods sold rose 3.4% year-over-year to $1.41 billion, while selling, general, and administrative expenses decreased by 4% to $96 million [6] - Adjusted EBITDA, excluding special items, was $653 million, reflecting a 29% year-over-year increase, with an adjusted EBITDA margin of 30.1%, up 330 basis points [6] - Adjusted operating income increased 34% year-over-year to $580 million, with an adjusted operating income margin of 26.8%, up 380 basis points [7] Balance Sheet and Cash Flow - At the end of the fourth quarter, Howmet had cash and cash equivalents of $742 million, up from $564 million at the end of December 2024, and long-term debt decreased to $2.86 billion from $3.31 billion [8] - In 2025, Howmet generated net cash of $1.88 billion from operating activities, compared to $1.30 billion in the previous year, with capital expenditures totaling $453 million [9] Future Outlook - For the first quarter of 2026, Howmet expects revenues between $2.225 billion and $2.245 billion, with adjusted EBITDA projected between $680 million and $690 million [12] - For the full year 2026, Howmet forecasts revenues in the range of $9.00 billion to $9.20 billion, with adjusted EBITDA expected between $2.71 billion and $2.81 billion [13]