Howmet Aerospace Q3 2026: sales up 29% to $2.70B on 45% gas-turbine growth; EPS up 49% to $1.42

Howmet Aerospace makes the hard-to-build metal parts inside jet engines, aircraft frames and power-plant gas turbines (turbine blades, precision fasteners, structural forgings), plus forged aluminum wheels for heavy trucks. In the third quarter of 2026 (July–September), sales rose 29% to $2,703 million and net income rose 47% to $567 million, or $1.42 per diluted share versus $0.95 a year earlier. Stripping out the two fastener businesses bought this year (CAM and Brunner) and the Savannah forging plant sold in March, "organic" revenue grew 25%, which the company calls its fastest quarterly growth on record. Every headline figure beat the top of the guidance Howmet gave in August, and the full-year outlook was raised again.

Key metrics

Operating margin is the share of revenue left after running the business, before interest and tax. Adjusted EBITDA is Howmet's own profit measure before depreciation and amortization, excluding one-off items. Free cash flow is cash from operations ($709 million) minus capital spending on plants and equipment ($147 million).

Where the growth came from

The release does not give dollar sales by end market this quarter, only growth rates: commercial aerospace +32%, defense aerospace +10%, gas turbines +45% and commercial transportation (trucks) +28%. CEO John Plant said he does not expect "any material impact on our spares demand from the Middle East conflict," pointing to the backlog of engine shop visits (scheduled overhauls of engines already flying) and the parts needed for the newest narrowbody engines. Spare parts for engines in service usually carry higher margins than parts for new aircraft, which helps explain the margin jump. On gas turbines, he said the 45% growth reflects market-share gains as well as higher output, and that customers want "to increase volumes beyond previous expectations."

Segment performance

Engine Products did most of the work. Segment Adjusted EBITDA rose $205 million (+57%) to $567 million on $364 million of extra revenue, all of it organic, driven by commercial aerospace and gas turbines. Its margin has now risen every quarter this year: 36.6% in Q1, 37.7% in Q2, 39.1% in Q3.

Fastening Systems grew 41%, but only 10% without the acquisitions: CAM and Brunner added $135 million of sales. The margin fell 1.4 points to 29.4%, "reflecting impact from the CAM acquisition," and has slipped each quarter since CAM closed in April (31.8% in Q1, 30.1% in Q2). The segment's depreciation and amortization more than doubled to $29 million from $12 million, as CAM's plants and acquired intangible assets (intangibles on the balance sheet rose to $855 million from $457 million at year-end) began to be written down.

Engineered Structures fell 4% because of the Savannah sale; excluding it, revenue grew 8%. Dropping lower-margin work lifted the margin 2.9 points to 23.7%.

Forged Wheels sales rose 32% on higher truck-wheel volumes and on higher aluminum costs passed through to customers. Passing through metal costs adds revenue with no profit on top, so the margin fell 3.3 points to 26.3% even though segment EBITDA rose 18% to $86 million "driven by favorable volume." The North American truck market recovery that Q2 hinted at is now showing up in volumes, not just prices.

What the headline numbers hide

• Cash conversion is good. Cash from operations was $709 million against $567 million of net income (1.25x). Free cash flow rose 33% even as capital spending climbed to $147 million from $108 million a year ago, as Howmet builds capacity.
• GAAP is slightly below adjusted, not above. GAAP EPS was $1.42 and adjusted EPS $1.46. The $17 million after-tax gap is $7 million of CAM/Brunner deal costs, $2 million of restructuring and a net $10 million of one-off tax charges (mainly a $5 million foreign pension plan termination charge). Q3 2025 had no special items, so the year-ago $0.95 is clean on both measures. Howmet does not add back the amortization of acquired intangibles, so CAM's extra amortization is a real cost in both figures.
• Little help from tax or buybacks. Pretax income rose 46% ($721 million vs $495 million), close to net income's 47%; the tax rate edged down to 21.4% from 22.2%. Diluted shares fell 1.2% to 400 million, which explains only about 2 points of the 49% EPS growth.
• One thing to watch: receivables. Customer receivables were $1,116 million at September 30, up 43% from $779 million at December 31. Part of that came with CAM, but the cash flow statement, which excludes acquisitions, still shows receivables absorbing $284 million of cash in nine months versus $180 million a year earlier. With sales up 24% for the nine months, that is not alarming, but it is growing faster than sales.
• Guidance was raised again (see below), after Q3 came in above the top of the August range.

On balance this is a clean quarter: profit grew from operations, the one-off items were small and net negative, and buybacks added only about 2 points to EPS growth.

Balance sheet and capital returned

Howmet spent $500 million on buybacks in Q3 (about 1.9 million shares) and $56 million on dividends, after raising the quarterly dividend 17% to $0.14 per share. It repaid only $60 million of commercial paper (short-term debt sold directly to investors), leaving $390 million outstanding. Total debt (long-term debt plus short-term borrowings) was $4,443 million at September 30, down from $4,501 million at June 30 but still well above the $3,050 million of December 2025, before the $1.8 billion CAM purchase. Cash was $507 million.

Did last time's read hold up?

Mostly yes. Our Q2 report called the guidance cautious, noting that the Q3 revenue midpoint of $2,575 million was barely above Q2. Q3 came in at $2,703 million, 5% above that midpoint, with adjusted EBITDA of $879 million against $830 million guided and adjusted EPS of $1.46 against $1.35. Of the three things we said to watch: Engine Products margins did more than hold near 38%, reaching 39.1%; Forged Wheels volumes did start to rise rather than just revenue from aluminum; but CAM is still pulling Fastening Systems margins down, not up. We also expected the extra CAM debt to come down quickly; so far the free cash flow has gone mainly to buybacks ($500 million) rather than debt repayment ($60 million).

Takeaway: Howmet's growth is accelerating and its profit is growing about twice as fast as its sales: organic revenue +25%, adjusted EBITDA +43%. The engine-parts business, now at a 39% segment margin on gas-turbine and spare-parts demand, is the engine of that, while the acquired fastener business is still diluting margins. Management is choosing buybacks over faster debt repayment, a choice its cash generation currently supports.

Outlook

Management raised full-year 2026 guidance and gave a first look at 2027:

For 2027 the company "envisage[s] revenue of approximately $11.5 billion," about 12% above the raised 2026 figure, and plans "elevated" capital spending beyond 2027 for aerospace and gas turbines.

Our read: The pattern of cautious guidance continues. The Q4 revenue midpoint of $2,750 million is only 1.7% above Q3's $2,703 million, even though Q3 grew 6% from Q2. The 2027 figure implies growth roughly halving from about 25% in 2026, partly because CAM's sales will no longer count as new. That would be a real slowdown if it held, but Howmet has beaten its own ranges all year. Three things to watch next quarter: whether Engine Products' margin stays near 39% as the roughly 1,000 workers added in Q2 and Q3 become productive; whether Fastening Systems' margin stops falling as CAM is integrated; and whether receivables keep growing faster than sales.

Source: Howmet Aerospace Q3 2026 earnings release, filed October 29, 2026 as Exhibit 99.1 to Form 8-K. The full 10-Q for the quarter had not been filed when this was written, so it does not include the 10-Q's management discussion. Quarterly dividend and buyback cash figures are the nine-month cash flow totals less the first-half totals in the Q2 2026 10-Q.