NYSE:HWM
Howmet Aerospace Inc.
A premier producer of critical aircraft structural parts and engine components driving the expansion of global air travel.
Key Metrics
Investment Thesis
Bull Case
Howmet benefits from a secular tailwind as global aviation demand rebounds and fleet modernization accelerates toward more fuel-efficient aircraft. The company's dominant market position and expanding mix of high-margin engine components provide a resilient earnings profile with strong potential for organic growth.
Bear Case
Investors should be wary of the heavy capital expenditure requirement of $453M, which can strain cash reserves if demand slows unexpectedly. High debt levels relative to equity, including $2.86B in long-term debt, could limit financial flexibility during periods of rising interest rates or economic recession.
About Howmet Aerospace Inc.
Howmet Aerospace Inc. is a leading global manufacturer of aerospace components and products, serving commercial airlines, defense contractors, and industrial markets with high-performance aluminum and titanium alloys.
Analysis
Management Discussion
The company demonstrated robust financial growth with revenue expanding from $5.66B in 2022 to $8.25B in 2025, driven by strong aircraft deliveries and pricing power. Net income surged alongside top-line growth, rising from $469M to $1.51B over the same period, while free cash flow generation of $1.88B highlights operational efficiency.
Industry Overview
The aerospace manufacturing industry is characterized by high barriers to entry, stringent regulatory standards, and a slow but steady growth trajectory linked to global GDP and passenger traffic recovery. Consolidation is common as leading players acquire smaller suppliers to secure supply chain control and achieve economies of scale.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $5.66B | $6.64B | $7.43B | $8.25B |
| Cost of Revenue | $4.10B | $4.77B | $5.12B | $5.43B |
| Gross Profit | $1.56B | $1.87B | $2.31B | $2.82B |
| Operating Expenses | $641.0M | $664.0M | $678.0M | $774.0M |
| Operating Income | $919.0M | $1.20B | $1.63B | $2.05B |
| R&D | $32.0M | $36.0M | $33.0M | $37.0M |
| G&A | $288.0M | $333.0M | $347.0M | $370.0M |
| Stock-Based Comp | $54.0M | $50.0M | $63.0M | $73.0M |
| D&A | $265.0M | $272.0M | $277.0M | $283.0M |
| Depreciation | $227.0M | $236.0M | $243.0M | $248.0M |
| Amortization | $36.0M | $35.0M | $33.0M | $32.0M |
| Other OpEx | $321.0M | $295.0M | $298.0M | $367.0M |
| Non-Operating Income | $-313.0M | $-228.0M | $-250.0M | $-206.0M |
| Interest Expense | $229.0M | $218.0M | — | — |
| Interest Income | — | — | $20.0M | $20.0M |
| Pre-Tax Income | $606.0M | $975.0M | $1.38B | $1.84B |
| Income Tax | $137.0M | $210.0M | $228.0M | $332.0M |
| Continuing Ops | $469.0M | $765.0M | $1.16B | $1.51B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $469.0M | $765.0M | $1.16B | $1.51B |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $469.0M | $765.0M | $1.16B | $1.51B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $3.14B | $3.32B | $3.36B | $3.78B |
| Cash & Equivalents | $791.0M | $610.0M | $564.0M | $742.0M |
| Accounts Receivable | $506.0M | $675.0M | $689.0M | $779.0M |
| Inventory | $1.61B | $1.76B | $1.84B | $1.85B |
| Prepaid Expenses | $206.0M | $249.0M | $249.0M | $392.0M |
| Other Current Assets | $31.0M | $17.0M | $20.0M | $17.0M |
| Long-Term Assets | $7.11B | $7.11B | $7.16B | $7.40B |
| PP&E (Net) | $2.33B | $2.33B | $2.39B | $2.59B |
| Intangibles | $521.0M | $505.0M | $475.0M | $457.0M |
| Goodwill | $4.01B | $4.04B | $4.01B | $4.02B |
| Operating Leases | $111.0M | $128.0M | $155.0M | $162.0M |
| Other LT Assets | $135.0M | $116.0M | $131.0M | $166.0M |
| Total Assets | $10.26B | $10.43B | $10.52B | $11.18B |
| Current Liabilities | $1.48B | $1.78B | $1.55B | $1.77B |
| Accounts Payable | $962.0M | $982.0M | $948.0M | $845.0M |
| Current Debt | $0 | $206.0M | $6.0M | $191.0M |
| Current Leases | $32.0M | $32.0M | $37.0M | $42.0M |
| Deferred Revenue | — | — | — | $147.0M |
| Other Current Liab | $488.0M | $564.0M | $558.0M | $546.0M |
| Long-Term Liabilities | $5.17B | $4.61B | $4.42B | $4.05B |
| Long-Term Debt | $4.16B | $3.50B | $3.31B | $2.86B |
| LT Operating Leases | $83.0M | $97.0M | $119.0M | $121.0M |
| Other LT Liab | $927.0M | $1.01B | $988.0M | $969.0M |
| Total Liabilities | $6.65B | $6.39B | $5.96B | $5.83B |
| Shareholders' Equity | $3.60B | $4.04B | $4.55B | $5.35B |
| Paid-In Capital | $3.95B | $3.68B | $3.21B | $2.53B |
| Retained Earnings | $1.03B | $1.72B | $2.77B | $4.09B |
| AOCI | $-1.84B | $-1.83B | $-1.88B | $-1.67B |
| Total L&E | $10.26B | $10.43B | $10.52B | $11.18B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $469.0M | $765.0M | $1.16B | $1.51B |
| Non-Cash Adjustments | $-333.0M | $-187.0M | $49.0M | $108.0M |
| Working Capital Changes | $597.0M | $323.0M | $94.0M | $268.0M |
| Cash from Operations | $733.0M | $901.0M | $1.30B | $1.88B |
| Capital Expenditures | $193.0M | $219.0M | $321.0M | $453.0M |
| Cash from Investing | $-135.0M | $-215.0M | $-316.0M | $-438.0M |
| Debt Issuances | $0 | $400.0M | $500.0M | $500.0M |
| Debt Repayments | $69.0M | $876.0M | $865.0M | $765.0M |
| Share Buybacks | $400.0M | $250.0M | $500.0M | $700.0M |
| Cash from Financing | $-526.0M | $-868.0M | $-1.03B | $-1.27B |
| FX Effect | $-2.0M | $0 | $-1.0M | $1.0M |
| Net Change in Cash | $70.0M | $-182.0M | $-45.0M | $178.0M |
| Beginning Cash | $722.0M | $792.0M | $610.0M | $565.0M |
| Ending Cash | $792.0M | $610.0M | $565.0M | $743.0M |
Frequently Asked Questions
How does Howmet Aerospace Inc. make money?
Commercial Aircraft Systems providing fuselage skins, frames, and floor panels; Engine Components manufacturing fan blades, compressor disks, and casings; Industrial Products offering specialized extrusions and heat exchangers for HVAC and energy sectors; Defense & Security supplying secure communication systems and ruggedized electronics.
What are the main risks for HWM?
Cyclical dependency on global airline capital expenditure budgets and aircraft delivery schedules which can fluctuate based on fuel prices and economic downturns; Exposure to volatile raw material costs for aluminum and titanium impacting gross margins; Geopolitical tensions affecting supply chains in key manufacturing regions like China and Europe.
What is HWM's competitive advantage?
Unmatched vertical integration allowing precise control over raw material supply chains and production costs; Proprietary aerospace-grade aluminum and titanium metallurgical expertise; Decades of established relationships with major OEMs like Boeing, Airbus, and GE Aviation ensuring long-term contract stability.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.