Howmet Aerospace grew Q2 2026 sales 24% to $2.55 billion (21% organic) on jet-engine spares and a 38% jump in gas-turbine sales; diluted EPS rose to $1.33 from $1.00 and full-year revenue guidance was raised by $400 million.
Revenue
$2.5B
+24.1% YoY
Net income
$534M
+31.2% YoY
Diluted EPS
$1.33
+33.0% YoY
Operating margin
27.9%
Overview
Howmet Aerospace makes the hard-to-build metal parts inside jet engines, aircraft frames and power-plant turbines: turbine blades, precision fasteners, structural forgings, plus forged aluminum wheels for trucks. In the second quarter of 2026 (April–June), sales rose 24% to $2,547 million and net income rose 31% to $534 million, or $1.33 per diluted share versus $1.00 a year earlier.
The growth came mainly from jet engines and gas turbines, not from acquisitions. Stripping out the two fastener businesses Howmet bought this year (CAM and Brunner) and the forging plant it sold, "organic" revenue still grew 21%, from $2,019 million to $2,447 million. Sales to the gas turbines market (turbines that generate electricity, a market now pulled along by power demand) rose 38%. Commercial aerospace grew 28%.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Revenue
$2,547M
$2,053M
+24.1%
Organic revenue (excl. deals)
$2,447M
$2,019M
+21%
Operating income
$711M
$521M
+36.5%
Operating margin
27.9%
25.4%
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Operating margin is the share of revenue left after running the business, before interest and tax. Adjusted EBITDA is Howmet's own measure of operating profit before depreciation and amortization, excluding one-off items. Free cash flow is cash from operations ($583 million) minus capital spending on plants and equipment ($104 million).
Why GAAP EPS and adjusted EPS tell different growth stories
GAAP EPS grew 33%, but adjusted EPS grew 46%. The gap comes from last year, not this year. Q2 2025's $1.00 included $36 million of after-tax one-off benefits, mostly a $35 million discrete tax benefit (from U.S. tax accounting method changes and stock-compensation deductions). Strip those out and last year's comparable figure was $0.91.
This quarter the one-offs cancelled out exactly. The costs were $22 million of acquisition expenses: legal and advisory fees, plus a purchase-accounting charge on CAM's inventory. They were offset by an $18 million discrete tax benefit and $4 million of tax relief on the acquisition costs themselves, so GAAP and adjusted EPS were both $1.33. The better measure of underlying earnings growth is therefore closer to 46% than 33%.
Where the money came from: end markets
End market
Q2 2026
Q2 2025
YoY Change
Commercial aerospace
$1,359M
$1,060M
+28%
Defense aerospace
$389M
$352M
+11%
Commercial transportation
$372M
$332M
+12%
Gas turbines
$321M
$233M
+38%
Other
$106M
$76M
+39%
Total
$2,547M
$2,053M
+24%
Commercial aerospace is now 53% of sales. In its management's-discussion section, the 10-Q credits "growth in the commercial and defense aerospace and gas turbines markets, including engine spares," along with "favorable product pricing" and cost pass-through. It says price increases were larger than the material and inflation costs passed on to customers. In other words, Howmet is raising real prices, not just passing along its own costs. Engine spares are replacement parts for engines already flying, and they usually earn higher margins than parts for new aircraft.
The commercial transportation growth looks better than it is. Forged Wheels volumes were 8% lower than a year earlier. Revenue rose only because higher aluminum costs were passed on to customers.
Segment performance
Segment
Revenue Q2 2026
Revenue Q2 2025
Change
Adj. EBITDA margin Q2 2026
Adj. EBITDA margin Q2 2025
Engine Products
$1,373M
$1,038M
+32%
37.7%
33.0%
Fastening Systems
$589M
$431M
+37%
30.1%
29.2%
Engineered Structures
$269M
$308M
−13%
23.8%
22.1%
Forged Wheels
$316M
$276M
+14%
27.8%
27.5%
(Prior-year Engine Products and Engineered Structures figures are recast for a titanium plant moved between the two segments in Q1 2026.)
Engine Products drove the quarter. Segment Adjusted EBITDA rose $174 million (+51%) to $517 million on $335 million of extra revenue, so about 52 cents of each additional sales dollar became segment profit. The segment also added about 485 net employees in the quarter "in support of expected revenue increases." Howmet is hiring and building capacity ahead of demand, and its margins are still rising.
Fastening Systems grew 37%, but much of that came from buying businesses. Both acquisitions sit in this segment: CAM ($1,812 million, closed April 6) and Brunner ($120 million, closed February 6). The 10-Q says the deals partly offset the segment's margin gain, so the underlying fastener business improved by more than the 0.9-point margin increase suggests.
Engineered Structures is shrinking by design. Sales fell 13% after Howmet sold its Savannah, Georgia disk-forging plant on March 31 (about $130 million of 2025 sales) and dropped lower-margin products. Margin still rose 1.7 points.
Forged Wheels earned more on fewer wheels. Segment EBITDA rose 16% on cost cuts and lower headcount. Volumes rose 7% from Q1, which the company describes as the start of a recovery in the North American truck market.
Corporate expense more than doubled to $52 million from $25 million, and $22 million of that was acquisition-related. Total Segment Adjusted EBITDA across all four segments rose from $613 million to $846 million.
Balance sheet and cash
The CAM purchase changed the balance sheet. Total debt (long-term debt plus short-term borrowings) rose from $3,050 million at December 31, 2025 to $4,501 million at June 30, 2026. That includes $1,200 million of notes issued in March and $450 million of commercial paper, which is short-term debt sold directly to investors. Cash fell from $742 million to $563 million. The 10-Q expects this year's debt actions to add about $38 million a year to interest expense. Quarterly interest expense already rose to $51 million from $38 million.
Howmet is still returning cash to shareholders. It bought back $300 million of stock in Q2 and another $200 million in July, for $800 million year to date through July, more than all of 2025 ($700 million). It also raised the quarterly dividend 17% to $0.14. Moody's moved its credit-rating outlook for Howmet to positive in May, and Fitch upgraded Howmet to A- in February.
Takeaway: This quarter's growth came mostly from businesses Howmet already owned, not from the CAM acquisition. Organic revenue rose 21%. Engine Products turned about half of each extra sales dollar into profit while hiring ahead of demand, which points to strong pricing power and a surge in engine-spares and gas-turbine demand. That level of cash generation should let Howmet pay down the roughly $1.45 billion of extra debt it took on for CAM quickly.
Outlook
Management raised full-year 2026 guidance in the earnings release (8-K Exhibit 99.1, filed August 6):
Guidance (baseline)
Q3 2026
FY 2026
Change to FY baseline
Revenue
$2,575M
$10,050M
+$400M
Adjusted EBITDA
$830M
$3,230M
+$170M
Adjusted EBITDA margin
32.2%
32.1%
+0.4 pts
Adjusted EPS
$1.35
$5.27
+$0.33
Free cash flow
—
$1,900M
+$150M
The 10-Q expects higher demand in 2026 from commercial and defense aerospace and from gas turbines, including engine spares. It expects the "modest recovery" in commercial transportation to continue into the second half, and Engineered Structures revenue to fall as that segment keeps shedding business. Capital spending is guided to about 5% of sales in 2026, and the CEO said in the release it will need to rise further in 2027.
Our read: The guidance looks cautious. The Q3 revenue midpoint of $2,575 million is barely above Q2's $2,547 million. The full-year midpoint implies second-half revenue of about $5,190 million, only slightly above Q2 doubled ($5,094 million). Howmet just beat its own ranges: the CEO said Q2 revenue, adjusted EBITDA, margin and adjusted EPS all came in above the top of guidance. Three things to watch:
whether engine-spares and gas-turbine demand keeps Engine Products margins near 38% once the new hires are fully productive;
how quickly CAM's margins move up toward the rest of Fastening Systems;
whether a stronger truck market lifts Forged Wheels volumes, not just revenue inflated by aluminum prices.
Source: Howmet Aerospace Form 10-Q for the quarter ended June 30, 2026 (filed August 6, 2026). Guidance, free cash flow, adjusted EPS and organic revenue are from the Q2 2026 earnings release filed the same day as Exhibit 99.1 to Form 8-K.