Aerospace and defense company Howmet (NYSE: HWM) reported Q3 2026 results exceeding the market’s revenue expectations, with revenue up 29.4% year on year to $2.70 billion. Revenue guidance for next quarter was $2.75 billion at the midpoint, 2.8% above analysts’ consensus estimates. Its non-GAAP profit of $1.46 per share was 6.6% above analysts’ consensus estimates.

For more on Howmet, read our free full research report.

Revenue growth

A company’s long-term revenue performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Howmet’s 14.6% annualized revenue growth over the last five years was strong. Its growth surpassed the average industrials company and shows its offerings resonate with customers.

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 15.7% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

Howmet also breaks out the revenue for its most important segments, Engine products and Fastening systems, which are 53.7% and 23.3% of revenue. Over the last two years, Howmet’s Engine products revenue (aircraft engines, industrial turbines) averaged 20.4% year-on-year growth while its Fastening systems revenue (connector products and tools) averaged 18.2% growth.

This quarter, Howmet reported strong year-on-year revenue growth of 29.4%, and its $2.70 billion of revenue topped Wall Street’s consensus estimates by 4.4%. Company management is currently guiding for a 26.8% year-on-year increase in revenue next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 15.1% over the next 12 months, according to S&P, similar to its two-year rate. This strong projection indicates that the market expects success for its products and services.

Operating margin

Operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Howmet has performed well over the last five years. It demonstrated strong profitability for an industrials business, with an average operating margin of 22.2%.

Looking at the trend in its profitability, Howmet’s operating margin rose by 12.5 percentage points over the last five years, as its revenue growth provided substantial operating leverage.

This quarter, Howmet generated an operating margin of 28.7%, up 2.8 percentage points year on year. This improvement 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 revenue through excessive spending on advertising and promotions.

Howmet’s EPS grew at a 40.6% compounded annual growth rate over the last five years, higher than its 14.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

A closer look at Howmet’s earnings can help explain its performance. As we mentioned earlier, Howmet’s operating margin expanded by 12.5 percentage points over the last five years. On top of that, its share count shrank by 7.8%. These are positive signs for shareholders because improving profitability and share buybacks boost EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Howmet, its two-year annual EPS growth of 42.8% was higher than its five-year trend. That acceleration is a positive sign, especially given the already high growth rate.

In Q3, Howmet reported adjusted EPS of $1.46, up from $0.95 in the same quarter last year. This result beat analysts’ consensus estimates by 6.6%. Over the next 12 months, Wall Street expects Howmet’s full-year EPS to grow 23.3% from $5.06 to $6.24, according to S&P.

Key takeaways from Howmet’s Q3 results

Howmet delivered a solid quarter, with revenue well ahead of analysts’ consensus estimates and full-year EBITDA guidance also above Wall Street’s consensus. Shares surged 7.6% to $210.06 immediately after the results.

Howmet had a solid quarter, but one earnings result doesn’t necessarily make the stock a buy. The latest quarter matters, but not nearly as much as longer-term fundamentals and valuation when deciding whether to buy the stock. For more on Howmet, read our full research report here (it’s free).