Fourth Quarter and Full Year 2025 Earnings Call John Plant: Executive Chairman and Chief Executive Officer Patrick Winterlich: EVP and Chief Financial Officer February 12, 2026 Important Information Forward–Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "anticipat ...

Core Insights - Howmet Aerospace reported record revenue and profit for FY 2025, with revenue of $8.3 billion, up 11% year over year, and net income of $1.5 billion, up 25% year over year [1][2][3] - The company generated $1.9 billion in cash from operations for FY 2025, with a free cash flow of $1.4 billion, reflecting strong cash generation capabilities [1][2] - For FY 2026, Howmet expects revenue growth of approximately 10% and improved profit and cash generation [1][4] Fourth Quarter 2025 Financial Results - Fourth quarter revenue reached $2.2 billion, a 15% increase year over year, driven by growth in commercial aerospace (up 13%), defense aerospace (up 20%), and gas turbines (up 32%) [1][2] - Net income for Q4 2025 was $372 million, or $0.92 per share, compared to $314 million, or $0.77 per share, in Q4 2024 [1][2] - Adjusted EPS for Q4 2025 was $1.05, up 42% year over year, with adjusted EBITDA of $653 million, a 29% increase year over year [1][2] Full Year 2025 Financial Performance - Full year operating income was $2.0 billion, up 25% year over year, with an operating income margin of 24.8%, an increase of 280 basis points [2][3] - Adjusted EBITDA for FY 2025 was $2.4 billion, up 26% year over year, with an adjusted EBITDA margin of 29.3%, up 350 basis points [2][3] - The company repurchased $700 million of common stock in FY 2025 and paid $181 million in dividends [1][2] Segment Performance - Engine Products segment reported Q4 revenue of $1.2 billion, a 20% increase year over year, with adjusted EBITDA of $396 million, up 31% [2][3] - Fastening Systems segment achieved Q4 revenue of $454 million, a 13% increase year over year, with adjusted EBITDA of $139 million, up 25% [3] - Engineered Structures segment reported Q4 revenue of $287 million, a 4% increase year over year, with adjusted EBITDA of $63 million, up 24% [3] Strategic Actions and Guidance - The company announced the acquisition of Consolidated Aerospace Manufacturing for approximately $1.8 billion, expected to close in the first half of 2026 [3][4] - Howmet redeemed all outstanding preferred stock for approximately $55 million and reduced its gross pension obligation by approximately $125 million [4] - For Q1 2026, revenue guidance is set between $2.225 billion and $2.245 billion, with adjusted EBITDA guidance of $680 million to $690 million [4]

Core Viewpoint - Boeing is set to open a fourth 737 MAX production line in Everett, Washington, by mid-summer, as announced by a Boeing executive at the Pacific Northwest Aerospace Association's Advance 2026 conference [1] Company Summary - The new production line will enhance Boeing's manufacturing capabilities for the 737 MAX aircraft [1]

Company Overview - TAT Technologies Ltd. (NASDAQ:TATT) designs aerospace parts including heat exchangers, cooling systems, and jet engine components for military and commercial aviation sectors [2] - The company operates in four niche categories: thermal solutions (~41% of revenues), auxiliary power units (~27%), landing gear (~5%), and leasing & trading (~14%) [2] Financial Performance - TAT Technologies was the top contributor in the long book during Q3 2025, with Q2 2025 revenues increasing 18% year-on-year [2] - The company's backlog increased by $85 million to reach $524 million, approximately three times current yearly sales [2] - Gross margins have improved sequentially for four consecutive quarters, with EBITDA margins reaching 14% in Q2 [2] Market Position and Growth Potential - The landing gear segment is entering a major MRO cycle, with strategic agreements in place with Embraer and Gulfstream [2] - The auxiliary power units (APUs) segment has a Total Addressable Market (TAM) of approximately $2.5 billion, with TAT Technologies currently holding less than 1% market share and aiming for 5-10% [2] - The company has a license agreement with Honeywell, becoming an approved provider of aftermarket service and support for APUs [2] Valuation and Future Outlook - The market is believed to underestimate TAT's multi-year growth potential, with a conservative estimate of $39 million for FY27 EBITDA [2] - At a reasonable 15x multiple, the fair value is projected to be in the low $50s per share [2] - TAT Technologies is expected to leverage its platform for further business wins and acquisitions, adding more value to the stock [2]

Core Viewpoint - GE Aerospace stock has experienced a significant bull run, increasing from a pandemic low of $37 to $320, representing a 768% surge and elevating its market capitalization to over $336 billion [1] Group 1 - The stock price recovery indicates strong investor confidence and potential for continued growth in the aerospace sector [1] - The market capitalization exceeding $336 billion reflects the company's robust performance and market position [1]

Core Insights - Vertical Aerospace Ltd (NYSE:EVTL) has launched its Valo electric aircraft in the US, marking its entry into the urban air mobility market with plans for air taxi routes in New York City [1][7] Company Overview - Vertical Aerospace Ltd is a British aerospace manufacturer based in Bristol, specializing in zero-emission electric vertical take-off and landing (eVTOL) aircraft [4] - The company is focused on its flagship piloted, four-passenger electric aircraft, the VX4, aiming to transform urban mobility by enhancing noise reduction, cleanliness, and speed [4] Product and Market Potential - The Valo aircraft is designed to operate at speeds of 150 mph and can cover distances up to 100 miles with zero emissions [2] - Potential use cases for the aircraft include airport transfers, connecting JFK to Manhattan, event travel to MetLife Stadium, and leisure travel to East Hampton [2] Strategic Positioning - Chris Bradshaw, President and CEO of Bristow Group, emphasized the importance of exploring eVTOL use cases in New York, leveraging operational experience for sustainable aviation concepts as technology and regulations evolve [3] - William Blair initiated coverage of EVTL with an Outperform rating, highlighting the company's strategic positioning in the emerging urban air mobility market and the significant luggage capacity of the Valo eVTOL, which is crucial for airport passenger transport [3]

Core Viewpoint - Hexagon Purus ASA has agreed to divest its aerospace business, Hexagon Masterworks Inc., to SpaceX for an enterprise value of approximately USD 15.0 million, which includes a cash consideration of USD 12.5 million and a contingent cash earn-out of USD 2.5 million [1][2]. Group 1: Transaction Details - The transaction involves the sale of 100% of the shares of Hexagon Masterworks Inc., which supplies high-pressure composite storage cylinders for aerospace and space launch applications in North America [1]. - The hydrogen business is excluded from the transaction, with existing hydrogen customer contracts to be transferred to other parts of Hexagon Purus prior to closing [1]. - The enterprise value of the transaction is approximately USD 15.0 million, consisting of a cash payment of USD 12.5 million at closing and a contingent earn-out of USD 2.5 million [2]. Group 2: Strategic Rationale - The aerospace business has developed well and is now at a stage where a dedicated aerospace owner is deemed necessary for its future growth [3]. - The company does not foresee significant potential in the hydrogen mobility market in North America in the near-to-medium term, making the divestment aligned with its ongoing portfolio review [3]. - This divestment is expected to strengthen the company's financial position and extend its liquidity runway [3]. Group 3: Management Commentary - The CEO of Hexagon Purus expressed satisfaction in finding a new owner for Masterworks, emphasizing the world-class expertise in composite cylinders and the integration into SpaceX's supply chain for long-term growth [4]. - The CEO acknowledged the hard work of the Masterworks team in developing the business and noted that the transaction allows Hexagon Purus to focus on its core strategic priorities [4].

Group 1 - The article provides a buy rating for Hexcel Corporation (HXL), indicating a belief in the company's earnings recovery and the end of the widebody inventory destocking cycle [1] - There is an improvement in production visibility at Airbus, which is expected to positively impact Hexcel's performance [1] - The investment approach focuses on understanding core business economics, including competitive moat, unit economics, reinvestment runway, and management quality, which are crucial for long-term free cash flow generation and shareholder value creation [1] Group 2 - The author emphasizes a focus on sectors with strong secular tailwinds, suggesting a positive outlook for industries that are expected to grow over time [1] - The motivation for sharing insights on Seeking Alpha is to provide valuable investment analysis and to engage with fellow investors for feedback [1] - The analysis aims to help readers concentrate on factors that drive long-term equity value, highlighting the importance of analytical and accessible research [1]

分组1 - Hexcel Corporation (HXL) is rated as a buy due to a strengthening earnings recovery narrative, with the end of the widebody inventory destocking cycle and improved production visibility at Airbus [1] - The investment approach emphasizes understanding core business economics, including competitive moat, unit economics, reinvestment opportunities, and management quality, which are crucial for long-term free cash flow generation and shareholder value creation [1] - The focus is on sectors with strong secular tailwinds, indicating a preference for industries that are expected to grow over time [1] 分组2 - The analyst is a self-educated investor with 10 years of experience, currently managing personal funds sourced from friends and family [1] - The motivation for sharing insights on Seeking Alpha is to provide valuable investment analysis and receive feedback from other investors [1] - The aim is to help readers concentrate on the factors that drive long-term equity value, promoting a blend of analytical rigor and accessibility in investment analysis [1]

Core Insights - GE Aerospace is a leading aerospace manufacturer with a market cap of approximately $326.9 billion, focusing on commercial and military aircraft engines and related technologies [1] Performance Overview - GE Aerospace's stock has increased by 51.8% over the past 52 weeks, significantly outperforming the S&P 500 Index, which gained 15.4% during the same period [2] - Year-to-date (YTD) performance shows GE Aerospace lagging behind the State Street Industrial Select Sector SPDR ETF, which surged 23.3% over the past 52 weeks [3] Financial Performance - In Q4 2025, GE Aerospace reported total orders of $27 billion, marking a 74% year-over-year increase, contributing to a year-end backlog of approximately $190 billion [5] - Analysts project an EPS of $7.45 for the full fiscal 2026, reflecting a 17% year-over-year growth, with a strong history of surpassing earnings expectations [6] Analyst Ratings - The stock has a consensus "Strong Buy" rating, with 15 out of 20 analysts recommending "Strong Buy," alongside two "Moderate Buys," two "Holds," and one "Strong Sell" [6] - Recent upgrades include UBS raising its price target on GE Aerospace to $374 from $368, maintaining a "Buy" rating based on solid fundamentals [7]