Howmet Aerospace's Q2 2025: Contradictions in Production Timelines, Defense Demand, and Engine Expansions

Production and capacity expansion timeline, defense production rates and demand, engine expansion and production timing are the key contradictions discussed in Howmet Aerospace's latest 2025Q2 earnings call.



Record Revenue and Profitability:
- Howmet Aerospace reported record revenue of $2.53 billion in Q2 2025, exceeding the high end of guidance by 9% year-over-year.
- The growth was driven by increased demand for engine spares in the commercial aerospace sector, robust defense aerospace growth, and strong performance in industrial markets.

EBITDA Margin Improvement:
- The company's EBITDA margin increased by 300 basis points year-over-year to 28.7%.
- This improvement was despite significant sequential revenue and EBITDA growth, supported by cost control measures and increased operational efficiency.

Strong Engine Products Segment:
- The Engine Products segment reported record quarterly revenue of $1.056 billion, up 13% year-over-year.
- Growth was driven by demand in commercial aerospace, defense aerospace, oil and gas, and IGT markets, with record engine spares volume.

Commercial Aerospace and Defense Growth:
- Commercial aerospace revenue grew by 8%, and defense aerospace revenue by 21%.
- The growth was supported by accelerating demand for engine spares, new engine builds, and strong defense programs like F-35 structures.

Free Cash Flow and Shareholder Returns:
- Howmet Aerospace reported free cash flow of $344 million in Q2 2025, enabling substantial share repurchases of $175 million.
- The strong cash flow allowed for increased dividends and debt repayment, reflecting the company's financial health and commitment to shareholder value.