Howmet Aerospace Reports Strong Q4 Earnings, Shares Surge
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy HWM?
Source: seekingalpha
- Earnings Beat: Howmet Aerospace (HWM) reported Q4 revenue of $2.2 billion, a 15% increase year-over-year, surpassing the consensus estimate of $2.13 billion, driven by robust demand in commercial aerospace and defense, resulting in a more than 10% surge in share price.
- Net Income Growth: The company's net income rose to $372 million from $314 million a year earlier, with earnings per share increasing to $0.92, exceeding analyst expectations of $0.97, indicating a significant improvement in profitability.
- Cash Flow and Capital Deployment: Howmet generated $654 million in operating cash flow and reported free cash flow of $530 million in the quarter, repurchasing $200 million in stock and paying a quarterly dividend of $0.12 per share, showcasing strong cash generation and capital allocation strategies.
- Positive Outlook: For Q1 2026, Howmet forecasts revenue between $2.225 billion and $2.245 billion, above market expectations, with adjusted EPS projected at $1.09 to $1.11, reflecting confidence in continued growth.
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Analyst Views on HWM
Wall Street analysts forecast HWM stock price to fall
13 Analyst Rating
12 Buy
1 Hold
0 Sell
Strong Buy
Current: 244.790
Low
209.00
Averages
236.77
High
258.00
Current: 244.790
Low
209.00
Averages
236.77
High
258.00
About HWM
Howmet Aerospace Inc. is a global provider of advanced engineered solutions for the aerospace and transportation industries. The Company’s primary business focus is on jet engine components, aerospace fastening systems, and airframe structural components. Its Engine Products segment produces investment castings, including airfoils, and seamless rolled rings primarily for aircraft engines and industrial gas turbine applications. Its Fastening Systems segment produces aerospace fastening systems, as well as commercial transportation, industrial and other fasteners. Its Engineered Structures segment produces titanium ingots and mill products for aerospace and defense applications and is vertically integrated to produce titanium forgings, titanium extrusions, and machining services for airframe, wing, aero-engine, and landing gear components. Its Forged Wheels segment provides forged aluminum wheels and related products for heavy-duty trucks and the commercial transportation market.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Strong Financial Performance: Howmet Aerospace reported Q4 2025 revenue of $2.17 billion, a 15% increase year-over-year, with full-year revenue reaching $8.15 billion, reflecting robust growth in the aerospace sector.
- EBITDA and Free Cash Flow: The fourth quarter EBITDA was $653 million, up 29%, while free cash flow reached $1.43 billion, exceeding guidance by over $100 million, demonstrating strong cash generation capabilities post capital expenditures.
- Positive Future Outlook: Management guided for Q1 2026 revenue of $2.235 billion and a full-year target of $9.1 billion with EBITDA of $2.76 billion, indicating confidence in growth prospects, particularly in commercial aerospace and defense sectors.
- Acquisition and Investment Plans: The company completed the acquisition of Brunner Inc. for $1.8 billion, expected to enhance its competitive position in the aerospace fasteners market, while planning to double gas turbine revenue over the next 3 to 5 years, showcasing significant market expansion potential.
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- AI Market Outlook: The global AI market in defense and aerospace is projected to grow from $4.2 billion in 2026 to $42.8 billion by 2036, with a compound annual growth rate of 26.4%, indicating that defense budgets are driving rapid advancements in related technologies.
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- Curtiss-Wright Contract Win: Curtiss-Wright has been selected by Boeing to supply mission computers for the U.S. Air Force's C-17 Globemaster III, with an estimated contract value exceeding $400 million, enhancing the operational life of this critical military platform and reinforcing Curtiss-Wright's pivotal role in defense modernization.
See More
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- Tech Sector Retreat: U.S. stocks experienced a significant decline on Thursday, with the S&P 500 down 1.57%, the Dow Jones down 1.34%, and the Nasdaq 100 down 2.04%, primarily driven by a sell-off in the Magnificent Seven tech stocks, indicating concerns over the profitability outlook in the tech sector.
- Cisco Systems Warning: Cisco Systems saw its stock plummet over 12% after forecasting that rising memory chip prices would erode profitability, raising investor concerns about future performance and potentially diminishing market confidence.
- Weak Economic Data: Initial jobless claims in the U.S. fell by 5,000 to 227,000, below the expected 223,000, while January existing home sales dropped 8.4% month-over-month to 3.91 million, marking a 16-month low, which reflects signs of economic slowdown that could impact market sentiment.
- Positive Earnings Season: Despite the overall market downturn, over 76% of S&P 500 companies that reported earnings exceeded expectations, with Q4 earnings projected to grow by 8.4%, indicating strong corporate profitability that may provide support for the market.
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- Tech Stock Pressure: The S&P 500 index fell by 0.52% and the Nasdaq 100 index dropped by 1.08% due to weakness in the Magnificent Seven tech stocks, indicating investor concerns that could dampen market confidence.
- Cisco Profit Warning: Cisco Systems forecasted that rising memory chip prices would erode profitability, leading to a more than 10% drop in its stock price, which may prompt investors to revise down their future performance expectations, negatively impacting overall market sentiment.
- Employment Data Impact: Initial US jobless claims fell by 5,000 to 227,000, reflecting a slightly weaker labor market, which could influence the Federal Reserve's monetary policy decisions and lower market expectations for future rate cuts.
- Chip Demand Recovery: Sandisk's stock rose over 7% following Kioxia's forecast of strong demand for NAND memory chips, indicating growth potential in the AI infrastructure sector, which may create new investment opportunities for related companies.
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