What drove Howmet's record 2025 performance?

Growth across commercial aerospace (+12% for the full year), defense aerospace (+21%), and gas turbines (+25%) drove the results, partially offset by a 5% decline in commercial transportation. Engine Products delivered the largest contribution, with FY 2025 segment revenue of $4.3B (+16%) and a segment Adjusted EBITDA margin of 33.3%. Fastening Systems margin expanded about 460 bps to 30.4%, and Engineered Structures margin expanded about 560 bps to 21.2%.

Why do GAAP and adjusted earnings differ, and how big is the gap?

Q4 2025 GAAP net income of $372M included about $54M of after-tax net special-item charges, mainly an ~$89M non-cash pension settlement tied to annuitizing the UK pension plan, plus a $15M loss on debt redemption and $88M of restructuring and other charges. For FY 2025, GAAP EPS was $3.71 versus $3.77 adjusted, a gap of roughly $0.06. Investors should weigh the adjusted figures alongside GAAP, since the company's definitions of special items are management-defined non-GAAP measures.

How does the CAM acquisition affect the investment case?

The ~$1.8B all-cash CAM purchase is significant relative to Howmet's size and is funded from cash flow and the balance sheet. It expands the fastener portfolio, which management says will further strengthen Fastening Systems, and is expected to close in the first half of 2026, subject to customary closing conditions and regulatory approvals. The filing does not quantify expected CAM revenue, EBITDA, or accretion, so investors should look for that detail on the earnings call and in subsequent filings. Closing risk and integration execution are key items to monitor.

What is the 2026 outlook and what should investors watch?

Management guided FY 2026 revenue to $9.0B–$9.2B (baseline $9.1B), Adjusted EBITDA to $2.71B–$2.81B, Adjusted EPS to $4.35–$4.55, and free cash flow to $1.55B–$1.65B. Q1 2026 guidance calls for revenue of about $2.24B and Adjusted EPS of about $1.10, with management expecting Q1 to be the low point for commercial transportation before a second-half recovery. Key watch items are commercial aerospace build rates and engine spares, gas turbine demand tied to data centers, and whether the guidance excludes the CAM acquisition, which the filing does not state explicitly.

How strong is Howmet's balance sheet and capital allocation?

Cash was $742M at year-end 2025 and long-term debt fell to about $2.86B from $3.31B, with total debt including current maturities around $3.05B. Debt actions in 2025 reduced debt by about $265M and annualized interest expense by about $22M, and the 2032 notes issuance was used to refinance the 2027 notes. Share repurchases of $700M and dividends of $181M, along with preferred stock redemption of about $55M, were funded from operating cash flow. Shareholders' equity rose to $5.35B from $4.55B, largely due to retained earnings. Investors should consider whether continued buybacks can be sustained alongside the roughly $1.8B CAM purchase.

HWM 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed February 12, 2026. Cited figures are marked; the original filing is the authoritative source.

Howmet Aerospace (HWM) reported record fourth quarter and full year 2025 results, with FY 2025 revenue of $8.3 billion^a (up 11% YoY) and record profitability and cash generation.

Q4 revenue reached $2.2 billion^b (up 15%), with Adjusted EBITDA excluding special items of $653 million (up 29%) and an Adjusted EBITDA margin of 30.1% (up 330 bps). GAAP EPS for FY 2025 was $3.71 (up 32%), while Adjusted EPS excluding special items was $3.77 (up 40%). Full-year free cash flow was $1.43 billion, equal to 93% conversion of net income excluding special items, after record capital expenditures of $453 million.

Capital allocation was shareholder-friendly and balance-sheet focused. Howmet repurchased a record $700 million^c of common stock in 2025 and an additional $150 million year-to-date in 2026, with about $1.35 billion of authorization remaining. The quarterly dividend was raised 50% to $0.12 per share, and the company redeemed its preferred stock, retired $625 million of 5.90% 2027 notes by issuing $500 million of 4.55% 2032 notes, and annuitized the remaining UK pension plan.

Management guided FY 2026 revenue to about $9.1 billion^d (roughly 10% growth), Adjusted EBITDA to about $2.76 billion, Adjusted EPS to $4.45, and free cash flow to about $1.6 billion. The main pending event is the approximately $1.8 billion all-cash acquisition of Consolidated Aerospace Manufacturing (CAM) from Stanley Black & Decker, expected to close in the first half of 2026, which would expand Howmet's fastener portfolio.

The company also closed the small Brunner Manufacturing fastener acquisition on February 6, 2026. Management highlighted record OEM backlog in commercial aerospace, strong gas turbine demand tied to data center power needs, and an expected trough in commercial transportation in Q1 2026 with recovery in the second half.

02—Key points

Key Highlights

FY 2025 record revenue of $8.3B (+11% YoY); Q4 revenue of $2.2B (+15% YoY), led by commercial aerospace (+13%), defense (+20%), and gas turbines (+32%).
FY 2025 Adjusted EPS excluding special items of $3.77 (+40% YoY); GAAP diluted EPS of $3.71 (+32% YoY), with Q4 Adjusted EPS of $1.05 (+42% YoY).
Q4 Adjusted EBITDA excluding special items of $653M (+29% YoY) at a 30.1% margin (+330 bps); FY 2025 Adjusted EBITDA of $2.4B (+26%) at 29.3%.
Free cash flow of $1.43B in FY 2025 (93% conversion of Adjusted net income) after record capex of $453M; cash from operations of $1.88B.
Capital returns: record $700M of buybacks in 2025, $150M more in early 2026 at $215.28/share average, quarterly dividend raised 50% to $0.12, and about $1.35B buyback authorization remaining.
Pending ~$1.8B all-cash acquisition of CAM from Stanley Black & Decker, expected to close in 1H 2026; Brunner Manufacturing acquisition closed February 6, 2026.
FY 2026 guidance: revenue ~$9.1B (~10% growth), Adjusted EBITDA ~$2.76B (30.3% margin), Adjusted EPS ~$4.45, and free cash flow ~$1.6B.

03—Questions

Frequently Asked Questions

What drove Howmet's record 2025 performance?
Growth across commercial aerospace (+12% for the full year), defense aerospace (+21%), and gas turbines (+25%) drove the results, partially offset by a 5% decline in commercial transportation. Engine Products delivered the largest contribution, with FY 2025 segment revenue of $4.3B (+16%) and a segment Adjusted EBITDA margin of 33.3%. Fastening Systems margin expanded about 460 bps to 30.4%, and Engineered Structures margin expanded about 560 bps to 21.2%.
Why do GAAP and adjusted earnings differ, and how big is the gap?
Q4 2025 GAAP net income of $372M included about $54M of after-tax net special-item charges, mainly an ~$89M non-cash pension settlement tied to annuitizing the UK pension plan, plus a $15M loss on debt redemption and $88M of restructuring and other charges. For FY 2025, GAAP EPS was $3.71 versus $3.77 adjusted, a gap of roughly $0.06. Investors should weigh the adjusted figures alongside GAAP, since the company's definitions of special items are management-defined non-GAAP measures.
How does the CAM acquisition affect the investment case?
The ~$1.8B all-cash CAM purchase is significant relative to Howmet's size and is funded from cash flow and the balance sheet. It expands the fastener portfolio, which management says will further strengthen Fastening Systems, and is expected to close in the first half of 2026, subject to customary closing conditions and regulatory approvals. The filing does not quantify expected CAM revenue, EBITDA, or accretion, so investors should look for that detail on the earnings call and in subsequent filings. Closing risk and integration execution are key items to monitor.
What is the 2026 outlook and what should investors watch?
Management guided FY 2026 revenue to $9.0B–$9.2B (baseline $9.1B), Adjusted EBITDA to $2.71B–$2.81B, Adjusted EPS to $4.35–$4.55, and free cash flow to $1.55B–$1.65B. Q1 2026 guidance calls for revenue of about $2.24B and Adjusted EPS of about $1.10, with management expecting Q1 to be the low point for commercial transportation before a second-half recovery. Key watch items are commercial aerospace build rates and engine spares, gas turbine demand tied to data centers, and whether the guidance excludes the CAM acquisition, which the filing does not state explicitly.
How strong is Howmet's balance sheet and capital allocation?
Cash was $742M at year-end 2025 and long-term debt fell to about $2.86B from $3.31B, with total debt including current maturities around $3.05B. Debt actions in 2025 reduced debt by about $265M and annualized interest expense by about $22M, and the 2032 notes issuance was used to refinance the 2027 notes. Share repurchases of $700M and dividends of $181M, along with preferred stock redemption of about $55M, were funded from operating cash flow. Shareholders' equity rose to $5.35B from $4.55B, largely due to retained earnings. Investors should consider whether continued buybacks can be sustained alongside the roughly $1.8B CAM purchase.

04—Continue

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