Howmet Aerospace Inc. Q1 FY2026 earnings call

John mentioned Hammett had a strong start to 2026 with sales of 2.31 billion, EBITDA 740 million, and earnings per share $1.22. EBITDA margin 32% and increased 320 basis points year-over-year. Cash generation 359 million. Completed Bruner acquisition in February and CAM acquisition on April 6th. Sold Savannah disk forging operation. Patrick discussed revenue up 19%, commercial aerospace growth 20%, defense aerospace growth 10%, commercial transportation revenue up 13%, gas turbine growth 39%, spares revenue growth to 23% in Q1 2026. Balance sheet and cash flow details, capital deployment including CapEx and share repurchases, and M&A transactions.

Engine products: Revenue increased 29% to $1.25 billion. EBITDA outpaced revenue growth with an increase of 44% to $458 million. EBITDA margin increased 400 basis points to 36.6%. Commercial aerospace was up 31%, defense aerospace was up 13%, and gas turbines market was up 39%. Fastening systems: Revenue increased 14% to $471 million. EBITDA continued to outpace revenue growth with an increase of 18% to $150 million. EBITDA margin increased 100 basis points to 31.8%. Engineered structures: Revenue decreased 3% to $294 million. Segment EBITDA was flat at $66 million. EBITDA margin increased 40 basis points to 22.4%. Forged wheels: Revenue was up 17%. EBITDA was strong at $90 million, an increase of 30% despite a challenging market. EBITDA margin increased 350 basis points to 30.5%.

Q2 guide: revenue of $2.4 billion plus or minus $10 million, EBITDA of $765 million plus or minus $5 million, earnings per share of $1.23 plus or minus a penny. Four-year guide: revenue of $9.65 billion plus or minus $75 million, EBITDA of $3.06 billion plus or minus $35 million, earnings per share of $4.94 plus or minus six cents, free cash flow of 1.75 billion plus or minus 50 million. 2026 organic growth expected to rise from 10% to 14% excluding M&A impact.

Ongoing uncertainty in relation to the situation in Iran, oil price shock, potential higher inflation, effects on global interest rates and currency exchange rates.

Q: John, can you walk through in a bit more detail as to what factors drove this step function change in commercial aerospace growth and engine products in the quarter? And then related to that, is engine products currently seeing much growth benefit from GTF Advantage, Hot Section Plus, or LEAP-1B Maverick shipments, or is that all still largely in front of you?

A: Okay, so first of all, the engine revenue increase is above aircraft build... Thank you very much.

Q: Yeah, good morning guys. So, John, maybe a big picture question for you. How should we think about how IGP is going to go for you all over time, kind of given the contracts that you're signing, the CapEx that is being invested, the hyperscaler spend? And then ultimately, how does that compete with your aerospace business? Because it seems like the hyperscalers are competing against the engine guys for similar assets and supply chains. How are you thinking about that?

A: IDG is a big subject at the moment... Got it. Thank you very much.

Q: Thanks so much. Good morning. John, you've given a pretty interesting growth outlook here for several of your end markets, but I'm wondering how you feel about the ability of your supply chain to deliver sufficient material, especially on, say, things like rare earths, and also the outlook for staffing, whether you're getting enough quality people.

A: Let me deal with input materials broadly and then rather specifically before moving on to human capital... That's great. Thanks, John.

Q: Thanks so much. Good morning. John, you've given a pretty interesting growth outlook here for several of your end markets, but I'm wondering how you feel about the ability of your supply chain to deliver sufficient material, especially on, say, things like rare earths, and also the outlook for staffing, whether you're getting enough quality people.

A: Let me deal with input materials broadly and then rather specifically before moving on to human capital... That's great. Thanks, John.

Q: Hey, good morning, everyone. So, you know, John, you know, you've done a few deals lately with buying the faster businesses and then also divesting the disk forging business. When you look at the portfolio today, where are there additional areas that you want to expand or are there areas that you want to prune, especially as we start seeing more industrial gas turbine demand come through?

A: We pretty much have the same stance today on the portfolios we've had for the last few years... Sounds great. Well, thank you very much, John.

Q: Hey, good morning. John, could you comment on where you are relative to capacity on the gas side? I think the first half of this year, I think you're pretty capacity constrained, and so is the growth we're seeing. purely price related. And then at the whole portfolio level, I know you won't give us the specifics on price anymore, but how would you compare it to last year? And do you see a year when price year on year price increases don't grow?

A: Okay, so the increase in revenue in the first quarter was, I'm going to say, very good... Thanks, John. Thanks, Miles.

Q: Morning, everyone. John, within the 14% organic growth for this year, could you kind of break that out? What's baked into that for aero, defense, and IGT, and I guess transportation wheels, kind of what builds up to that? And As we think about 27 with, you know, the incremental additional capacity coming online, you know, GTF advantage, you know, full year of LEAP 1B, IGT, is it possible that organic growth accelerates in 27 relative to the 14% you're now calling for in 26?

A: That's a big one. I think I'm happier talking about 2026 than 2027 at the moment... All right. Thanks, John. Appreciate it.

Q: Thanks very much, and morning, everyone. I wanted to ask, in terms of the legacy aftermarket and the potential exposure there to the macro environment, I think, and correct me if I'm wrong, I don't want to put words in your mouth, but I think, John, you've kind of talked before about the expected endurance of the legacy fleet. And I assume that it's early to be making any judgments about that, but I'm wondering if you can comment a bit further and talk about some of the things that you're looking for there. Oh, and also what proportion of the spares is that kind of legacy fleet?

A: Yeah. The essential picture is pretty similar to what I've talked about in the past... Great. Great. Thanks very much. Thank you. And this concludes our question and answer session as well as today's conference session. Thank you for attending today's presentation and you may now disconnect.