Howmet Aerospace Inc. (NYSE:HWM) reported better-than-expected second-quarter results Thursday and raised its full-year outlook, sending the stock higher following the release.

Shares gained as investors responded to the earnings and revenue beats, stronger margins, robust cash generation and increased 2026 guidance.

Adjusted earnings were $1.33 a share, beating the $1.25 estimate.

Revenue rose 24% year over year to $2.547 billion, above the $2.428 billion estimate. Organic growth was 21%, while GAAP EPS increased to $1.33 from $1 a year earlier.

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Profitability and Market Growth

Adjusted EBITDA rose 39% to $817 million, with margin expanding 340 basis points to 32.1%. GAAP operating income increased 36% to $711 million, and operating margin improved to 27.9%.

Management said key results exceeded the high end of guidance.

Commercial aerospace revenue grew 28%, gas turbines rose 38% and defense aerospace increased 11%.

Management cited record aircraft backlogs, higher engine spares demand and strength in defense and gas turbines, while commercial transportation began to recover.

Segment Performance

Engine Products revenue rose 32% to $1.373 billion. Adjusted EBITDA increased 51% to $517 million, and margin reached 37.7%.

Fastening Systems revenue grew 37% to $589 million, including contributions from the CAM and Brunner acquisitions. Adjusted EBITDA rose 40% to $177 million, with a 30.1% margin.

Engineered Structures revenue declined 13% to $269 million following the Savannah disk forging facility divestiture and product rationalization.

Adjusted EBITDA fell 6% to $64 million, though margin improved to 23.8%. Forged Wheels revenue increased 14% to $316 million despite an 8% volume decline, while adjusted EBITDA rose 16% to $88 million.

Cash Flow and Capital Returns

Operating cash flow was $583 million, while free cash flow totaled $479 million. Ending cash, cash equivalents and restricted cash were $564 million.

Reported borrowings were about $4.5 billion, and net debt-to-LTM adjusted EBITDA stood at 1.4 times.

Howmet repaid $186 million of debt, repurchased $300 million of stock during the quarter and another $200 million in July. It also increased its quarterly dividend 17% to 14 cents a share.

Raised Full-Year Outlook

Howmet raised full-year adjusted EPS guidance to $5.23-$5.31 from $4.88-$5, above the $5.06 estimate.

The company increased sales guidance to $10 billion-$10.1 billion from $9.575 billion-$9.725 billion, above the $9.753 billion estimate. It projected free cash flow of $1.85 billion-$1.95 billion.

Howmet identified tariffs, trade policies, energy costs, supply-chain disruption and regulatory risks as potential headwinds.

HWM Price Action: Howmet Aerospace shares were up 0.21% at $292.02 at the time of publication on Thursday. The stock traded at a new 52-week high earlier in the day, according to Benzinga Pro data.

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