Howmet Aerospace Inc. (NYSE:HWM) announced its second-quarter 2025 financial results on Thursday. The company exceeded all guidance and strengthened its position in the aerospace and defense sectors.
The company reported record revenue and profit, driven by robust demand, prompting an upward revision of its full-year 2025 outlook.
Howmet Aerospace achieved record revenue of $2.05 billion, a 9% year-over-year increase, fueled by strong growth in commercial aerospace (up 8%), defense aerospace (up 21%), and industrial and other markets (up 17%), surpassing consensus estimates of $2.007 billion.
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Net Income reached $407 million, or $1.00 per share. Adjusted earnings per share rose 36% year over year to 91 cents, beating the consensus estimate of 87 cents.
Adjusted EBITDA (excluding special items) surged 22% to $589 million, with the margin expanding 300 basis points to 28.7%. Adjusted operating income margin expanded 330 bps to 25.3%.
The company generated a record $344 million in free cash flow, marking its ninth consecutive positive quarter. Operating cash flow totaled $446 million, with a quarter-end cash balance of $546 million.
In the second quarter, Engine Products led segment performance with a 13% year-over-year revenue increase to $1.1 billion, fueled by strength in aerospace, industrial gas turbines, and the oil and gas markets. The segment delivered a 20% rise in adjusted EBITDA, reaching $349 million, representing a healthy margin of 33.0%.
Fastening Systems followed with a 9% revenue increase to $431 million, supported by robust demand in both commercial and defense aerospace. Adjusted EBITDA for the segment climbed 25% to $126 million, translating to a margin of 29.2%.
Engineered Structures saw revenue grow 5% to $290 million, primarily driven by gains in defense aerospace. The segment’s adjusted EBITDA surged 55% to $62 million, reflecting a margin of 21.4%, the strongest year-over-year EBITDA growth among all divisions.
Meanwhile, Forged Wheels was the only segment to post a decline in revenue, which edged down 1% to $276 million due to softer commercial transportation volumes. However, this was partially offset by favorable aluminum cost pass-throughs. Despite the top-line pressure, the segment’s adjusted EBITDA rose 1% to $76 million, yielding a 27.5% margin.
Howmet Aerospace repurchased $175 million of common stock in the quarter and an additional $100 million in July 2025. Year-to-date, $400 million in stock has been repurchased, with $1.797 billion remaining under authorization.
The Board increased the quarterly common stock dividend by 20% to 12 cents per share, to be paid on August 25, 2025, to holders of record as of the close of business on August 8, 2025
The company also paid down $76 million of its U.S. dollar-denominated Term Loan, reducing annualized interest expense and bringing the net debt-to-LTM EBITDA ratio to a record low of 1.3x.
Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant commented, “Turning to the outlook, the commercial aerospace market should continue to grow, driven by healthy passenger traffic, extraordinarily high OEM backlogs and the desire for new, fuel-efficient aircraft. We acknowledge positive signs for narrow body build rate increases, particularly on the Boeing 737MAX. Demand for engine spares also remains robust across all markets. The defense aerospace market continues to show strength that should carry through 2025.”
“Additionally, demand for industrial gas turbines fueled by significant data center expansion should remain strong for the balance of the year. The commercial transportation market remains weak. Taking these factors into account, the overall picture appears healthy, and we are increasing our full year 2025 guidance on all metrics.”
Outlook
For the third quarter, the company expects revenue between $2.02 billion and $2.04 billion versus the consensus of $2.027 billion, with adjusted earnings per share projected between 89 and 91 cents versus the consensus of 87 cents. Adjusted EBITDA is forecast between $575 million and $585 million, representing a margin of 28.5% to 28.7%.
The company raised its full-year 2025 outlook, now expecting revenue of $8.08 billion to $8.18 billion, up $100 million from the prior baseline versus the consensus of $8.084 billion. Adjusted EPS is projected at $3.56 to $3.64, a 20-cent increase versus the consensus of $3.51.
Adjusted EBITDA is guided between $2.3 billion and $2.34 billion, up $70 million, with a margin of approximately 28.5% to 28.6%, up 50 basis points. Free cash flow is now expected to range from $1.175 billion to $1.275 billion, an increase of $75 million.
Price Action: HWM shares are trading lower by 6.53% to $179.75 at Thursday’s last check.
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