How did the CAM acquisition affect Howmet's second quarter results?

The approximately $1.8 billion CAM acquisition, completed April 6, 2026, contributed to Fastening Systems revenue growth of 37% and segment adjusted EBITDA growth of 40%. Management said CAM was absorbed into adjusted EBITDA margin, which expanded 340 basis points. Organic revenue growth of 21% excludes net acquisition and divestiture effects of $100 million in the quarter.

Is Howmet's balance sheet getting more leveraged, and how does management plan to address it?

Yes. Total debt, including short-term borrowings, increased from about $3.05 billion at year-end 2025 to about $4.5 billion at June 30, 2026, largely to fund CAM. Management stated that continued healthy cash generation should allow it to return to pre-CAM leverage levels in short order. The company also refinanced part of its debt profile, repaying a $186 million yen term loan and synthetically converting $300 million of 6.75% bonds into a yen liability at about 3.88%.

Why is management guiding to higher capital expenditures, and what does this mean for free cash flow?

Management said capital expenditure requirements continue to increase and expects to increase them further in 2027 to support organic growth in aerospace and gas turbines. Despite this, full-year 2026 free cash flow guidance was raised to a baseline of $1.90 billion. Investors should monitor whether higher 2027 capex weighs on free cash flow generation relative to current levels.

How much capital has Howmet returned to shareholders, and what capacity remains?

Howmet repurchased $300 million of common stock in Q2 2026 at an average price of $250.61 and $200 million in July at $276.61, for $800 million year to date. Remaining authorization was $697 million as of August 6, 2026. The quarterly dividend was raised 17% to $0.14 per share, payable August 25, 2026. Management noted repurchases may be modified or suspended at any time.

What is the outlook for the commercial transportation business and the segments with weaker results?

Forged Wheels revenue rose 14% to $316 million despite an 8% decline in commercial transportation volumes, as aluminum pass-through pricing offset lower volumes. Volumes rose 7% sequentially, which management attributed to the beginning of a North American commercial transportation recovery. Engineered Structures revenue fell 13% to $269 million due to the Savannah disk forging divestiture and product rationalization, though its segment margin improved to 23.8%.

HWM 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed August 6, 2026. Cited figures are marked; the original filing is the authoritative source.

Howmet Aerospace reported strong second quarter 2026 results, with revenue of $2.55 billion^a, up 24% year over year and 21% on an organic basis.

GAAP and adjusted EPS were both $1.33^b, up 33% and 46% respectively from the prior year. Adjusted EBITDA rose 39% to $817 million, and adjusted EBITDA margin expanded about 340 basis points to 32.1%, with growth across commercial aerospace, defense aerospace, and gas turbines. Free cash flow was $479 million, up 39%, and year-to-date free cash flow of $838 million is up 75%.

Growth was supported by the April 2026 acquisition of CAM for approximately $1.8 billion^c, which contributed to revenue and margin results. Segment performance was led by Engine Products, where revenue rose 32% and segment adjusted EBITDA margin reached 37.7%. Fastening Systems revenue rose 37%, while Engineered Structures revenue declined 13% after the Savannah disk forging divestiture.

Forged Wheels revenue rose 14% despite an 8% decline in commercial transportation volumes, which was offset by aluminum pass-through pricing. Management raised full-year 2026 guidance. Baseline revenue is now $10.05 billion^d, with a range of $10.00 to $10.10 billion.

Baseline adjusted EBITDA is $3.23 billion, adjusted EPS is $5.27 (up $0.33 at the midpoint), and free cash flow is $1.90 billion (up $150 million at the midpoint). Q3 2026 guidance calls for revenue of $2.565 to $2.585 billion and adjusted EPS of $1.34 to $1.36. Capital allocation remained active.

Howmet repurchased $300 million of stock in Q2 and another $200 million in July, bringing year-to-date repurchases to $800 million, which already exceeds all of 2025. Remaining authorization stood at $697 million as of August 6. The quarterly dividend was raised 17% to $0.14 per share.

Total debt increased to roughly $4.5 billion, reflecting CAM financing, though management expects to return to pre-CAM leverage levels quickly. Management also flagged rising capital expenditure needs for 2027 to support growth in aerospace and gas turbines.

Overall, the filing shows broad-based operating momentum, margin expansion, and strong cash generation, alongside a higher-leverage balance sheet and an increasingly capital-intensive growth outlook. Investors will likely focus on whether margin gains and free cash flow can be sustained as integration of CAM proceeds and as capital spending increases in 2027.

02—Key points

Key Highlights

Q2 2026 revenue of $2,547 million rose 24% year over year (21% organic), with growth in commercial aerospace (+28%), defense aerospace (+11%), and gas turbines (+38%).
GAAP EPS and adjusted EPS were both $1.33, up 33% and 46% year over year, with no net special items affecting the quarter's EPS comparison.
Adjusted EBITDA of $817 million rose 39%, and adjusted EBITDA margin expanded approximately 340 basis points to 32.1%.
Free cash flow was $479 million in Q2 (up 39%) and $838 million year to date (up 75%), after $198 million of year-to-date capital expenditures.
Full-year 2026 guidance was raised: baseline revenue of $10.05 billion, adjusted EBITDA of $3.23 billion, adjusted EPS of $5.27 (up $0.33), and free cash flow of $1.90 billion (up $150 million).
Share repurchases totaled $800 million year to date through July, exceeding all 2025 repurchases, with $697 million of authorization remaining; the quarterly dividend increased 17% to $0.14.
Total debt rose to roughly $4.5 billion following CAM financing, while the Japanese yen term loan was repaid and a cross-currency swap was executed, reducing annualized interest expense by $12 million.

03—Questions

Frequently Asked Questions

How did the CAM acquisition affect Howmet's second quarter results?
The approximately $1.8 billion CAM acquisition, completed April 6, 2026, contributed to Fastening Systems revenue growth of 37% and segment adjusted EBITDA growth of 40%. Management said CAM was absorbed into adjusted EBITDA margin, which expanded 340 basis points. Organic revenue growth of 21% excludes net acquisition and divestiture effects of $100 million in the quarter.
Is Howmet's balance sheet getting more leveraged, and how does management plan to address it?
Yes. Total debt, including short-term borrowings, increased from about $3.05 billion at year-end 2025 to about $4.5 billion at June 30, 2026, largely to fund CAM. Management stated that continued healthy cash generation should allow it to return to pre-CAM leverage levels in short order. The company also refinanced part of its debt profile, repaying a $186 million yen term loan and synthetically converting $300 million of 6.75% bonds into a yen liability at about 3.88%.
Why is management guiding to higher capital expenditures, and what does this mean for free cash flow?
Management said capital expenditure requirements continue to increase and expects to increase them further in 2027 to support organic growth in aerospace and gas turbines. Despite this, full-year 2026 free cash flow guidance was raised to a baseline of $1.90 billion. Investors should monitor whether higher 2027 capex weighs on free cash flow generation relative to current levels.
How much capital has Howmet returned to shareholders, and what capacity remains?
Howmet repurchased $300 million of common stock in Q2 2026 at an average price of $250.61 and $200 million in July at $276.61, for $800 million year to date. Remaining authorization was $697 million as of August 6, 2026. The quarterly dividend was raised 17% to $0.14 per share, payable August 25, 2026. Management noted repurchases may be modified or suspended at any time.
What is the outlook for the commercial transportation business and the segments with weaker results?
Forged Wheels revenue rose 14% to $316 million despite an 8% decline in commercial transportation volumes, as aluminum pass-through pricing offset lower volumes. Volumes rose 7% sequentially, which management attributed to the beginning of a North American commercial transportation recovery. Engineered Structures revenue fell 13% to $269 million due to the Savannah disk forging divestiture and product rationalization, though its segment margin improved to 23.8%.

04—Continue

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