Aerospace and defense company Howmet (NYSE: HWM) reported Q1 CY2026 results beating Wall Street’s revenue expectations, with sales up 19.1% year on year to $2.31 billion. Guidance for next quarter’s revenue was optimistic at $2.4 billion at the midpoint, 2.7% above analysts’ estimates. Its non-GAAP profit of $1.22 per share was 10.3% above analysts’ consensus estimates.

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Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant said, "The Howmet team delivered a strong start to 2026, with revenue, adjusted EBITDA, adjusted EBITDA margin, and adjusted earnings per share all exceeding the high end of guidance. Revenue growth accelerated to 19% year over year, driven by strong growth across our key end markets, and adjusted EBITDA margin expanded 320 basis points year over year to 32.0%. Free cash flow performance was outstanding at $359 million after spending $94 million in capital expenditures, supporting the future growth rate of the Company. The free cash flow also enabled $300 million in common stock repurchases. "

Company Overview

Inventing the first forged aluminum truck wheel, Howmet (NYSE: HWM) specializes in lightweight metals engineering and manufacturing multi-material components used in vehicles.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, Howmet’s 12.3% annualized revenue growth over the last five years was excellent. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Howmet’s annualized revenue growth of 12.1% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

We can dig further into the company’s revenue dynamics by analyzing its most important segments, Engine products and Fastening systems, which are 54.2% and 20.4% of revenue. Over the last two years, Howmet’s Engine products revenue (aircraft engines, industrial turbines) averaged 17% year-on-year growth while its Fastening systems revenue (connector products and tools) averaged 11.4% growth.

This quarter, Howmet reported year-on-year revenue growth of 19.1%, and its $2.31 billion of revenue exceeded Wall Street’s estimates by 3.2%. Company management is currently guiding for a 16.9% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 13% over the next 12 months, similar to its two-year rate. This projection is noteworthy and indicates the market sees success for its products and services.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Howmet has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 20.9%.

Looking at the trend in its profitability, Howmet’s operating margin rose by 11.2 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q1, Howmet generated an operating margin profit margin of 32.6%, up 7.1 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Howmet’s EPS grew at 48.1% compounded annual growth rate over the last five years, higher than its 12.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Howmet’s earnings to better understand the drivers of its performance. As we mentioned earlier, Howmet’s operating margin expanded by 11.2 percentage points over the last five years. On top of that, its share count shrank by 8.2%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Howmet, its two-year annual EPS growth of 43.7% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q1, Howmet reported adjusted EPS of $1.22, up from $0.86 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Howmet’s full-year EPS of $4.13 to grow 20.3%.

Key Takeaways from Howmet’s Q1 Results

This was a beat and raise quarter. We were impressed that Howmet beat analysts’ revenue and EPS expectations this quarter. We were also excited that the company lifted full-year revenue and EPS guidance, showing that business momentum is stronger than the company previously saw. Zooming out, we think this was a very good print with some key areas of upside. The stock traded up 10.8% to $284.03 immediately following the results.

Howmet had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).