Howmet Aerospace Inc. (NYSE:HWM) shares traded higher on Thursday after the company announced record third-quarter 2025 results that topped Wall Street estimates and raised its full-year outlook on all metrics.
The Pittsburgh-based aerospace components manufacturer reported adjusted earnings per share of 95 cents, beating the 91 cents estimate, and revenue of $2.089 billion, surpassing the $2.042 billion estimate, as strong aerospace demand fueled double-digit growth across key segments.
Revenue increased 14% year over year, led by a 15% jump in commercial aerospace, 24% in defense aerospace, and 18% in industrial and other markets, partially offset by a 3% decline in commercial transportation.
Operating income and adjusted operating income both reached $542 million, representing a 29% year-over-year increase, with an operating margin of 25.9%, a 300-basis-point improvement.
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Adjusted EBITDA excluding special items rose 26% year over year to $614 million, with margins improving 290 basis points to 29.4%.
The company generated $531 million in cash from operations and $423 million in free cash flow, after incurring $108 million in capital expenditures, marking a record quarterly cash generation.
By segment, Engine Products revenue grew 17% to $1.1 billion, with segment adjusted EBITDA of $368 million, up 20%, and margins rising to 33.3%.
Fastening Systems revenue rose 14% to $448 million, with adjusted EBITDA up 35% to $138 million and margins expanding 480 basis points to 30.8%.
Engineered Structures revenue increased 14% to $289 million, while adjusted EBITDA climbed 53% to $58 million, with margins improving 510 basis points to 20.1%.
Forged Wheels revenue was $247 million, roughly flat year over year, while adjusted EBITDA increased 14% to $73 million, with a 29.6% margin.
The company repurchased $200 million of common stock in the quarter at an average price of $182.20 per share and an additional $100 million in October at $191.86 per share, bringing year-to-date repurchases through October to $600 million.
The board also approved a 20% dividend increase to $0.12 per share, paid on August 25, 2025.
"The Howmet team drove a very strong third quarter, with results exceeding the high end of guidance on all metrics,” executive chairman and CEO John Plant said. “Notably, revenue growth accelerated to 14% year over year, versus 8% growth in the first half, driven by healthy demand across the commercial aerospace, defense aerospace, and industrial and other markets."
Outlook:
For the fourth quarter of 2025, Howmet expects adjusted EPS to be between $0.94 and $0.96, compared to the $0.94 estimate, and revenue to be between $2.090 billion and $2.110 billion, compared to the $2.124 billion estimate.
The company raised full-year 2025 guidance across the board, now projecting adjusted EPS between $3.66 and $3.68 versus $3.56 to $3.64 previously and the $3.62 estimate, and revenue between $8.175 billion and $8.195 billion versus the earlier $8.080 billion to $8.180 billion range and the $8.157 billion estimate.
Free cash flow is expected to be between $1.275 billion and $1.325 billion, with an adjusted EBITDA margin of approximately 29%.
Looking ahead, Howmet anticipates approximately $9 billion in revenue for 2026, representing approximately 10% year-over-year growth, supported by sustained demand in commercial and defense aerospace, as well as expanding industrial markets.
Price Action: HWM shares are trading 1.58% higher at $206.70 at the last check on Thursday.
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