Howmet Aerospace 2025 Q2 Earnings Beats Expectations as Net Income Surges 53%

Howmet Aerospace (HWM) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. The company exceeded expectations with a 9% increase in revenue to $2.05 billion and a 53% rise in net income to $407 million. Howmet Aerospace raised its full-year guidance, anticipating continued strength in commercial aerospace and industrial markets. Despite challenges in the commercial truck segment, the company projects healthy incrementals and robust cash flow driven by new investments, positioning itself for sustained growth and profitability.

Revenue
Howmet Aerospace's revenue in the second quarter of 2025 reached $2.05 billion, marking a 9.2% increase from the previous year. The Engine Products segment contributed $1.06 billion, demonstrating robust performance. The Fastening Systems segment recorded $431 million, reflecting growth in aerospace markets. Engineered Structures reported $290 million, primarily driven by defense aerospace gains. Meanwhile, Forged Wheels saw revenue of $276 million, slightly offset by lower commercial transportation volumes.

Earnings/Net Income
Howmet Aerospace's earnings per share (EPS) rose significantly, reaching $1.01 in 2025 Q2 from $0.65 in 2024 Q2, indicating strong profitability. The company's net income surged 53.0% to $407 million, reflecting continued earnings growth. The EPS performance was commendable, showcasing the company's robust financial health.

Price Action
The stock price of Howmet Aerospace has dropped 4.27% during the latest trading day, has dropped 3.76% during the most recent full trading week, and has dropped 3.42% month-to-date.

Post-Earnings Price Action Review
The strategy of investing in Howmet Aerospace when revenue beats and holding for 30 days delivered remarkable results, achieving a 986.05% return, significantly outperforming the benchmark return of 85.57%. With an excess return of 900.48%, the strategy's focus on revenue beats led to substantial gains. A Sharpe ratio of 1.79 and a maximum drawdown of 0.00% indicate strong risk-adjusted returns and avoidance of significant losses, making this approach a robust choice for investors seeking both growth and stability. This strategy's impressive performance underscores the importance of capitalizing on positive revenue surprises and maintaining a disciplined investment approach.

CEO Commentary
John C. Plant, Executive Chairman & CEO, stated that Howmet Aerospace's second quarter results were strong, with revenue growth of 9% year-over-year, exceeding $2 billion. He highlighted that the growth was driven by increasing demand in commercial aerospace, particularly for engine spares, and robust defense aerospace performance. Plant emphasized the importance of preparing for new capacity, particularly for turbine airfoils, with significant investments in headcount and infrastructure. He conveyed optimism about the future, noting continued strength in key markets despite challenges in commercial transportation, and expressed confidence in maintaining EBITDA margins above 28%.

Guidance
Howmet Aerospace expects Q3 revenue to be approximately $2.03 billion, with EBITDA around $580 million and EPS at $0.90. For the full year, revenue guidance has been raised to $8.13 billion, EBITDA to $2.32 billion, and EPS to $3.60. Additionally, free cash flow guidance has increased to $1.225 billion. The company anticipates continued strength in commercial aerospace and industrial markets, offset by challenges in the commercial truck segment, while projecting healthy incrementals and robust cash flow driven by new investments.

Additional News
Recently, Howmet Aerospace announced a significant increase in its quarterly dividend, raising it by 20% to $0.12 per share, reflecting its commitment to enhancing shareholder value. The company also executed a substantial share buyback program, repurchasing $175 million of common stock in the second quarter and an additional $100 million in July, demonstrating its focus on returning capital to shareholders. Furthermore, Howmet Aerospace paid down $76 million of its U.S. dollar-denominated Term Loan, improving its balance sheet and reducing annual interest expenses. These strategic financial moves underscore Howmet's dedication to strengthening its financial position and rewarding shareholders amidst ongoing market dynamics.