Howmet Aerospace Inc. (HWM) continues to build on its margin expansion story, driven by a robust second-quarter 2026 performance across multiple business segments.
The company’s cost of goods sold rose 16.9% year over year to $1.60 billion in the second quarter of 2026, while selling, general, administrative and other expenses surged 66.3% to $148 million.
Despite those rising costs, Howmet delivered an adjusted EBITDA margin of 32.1% in the second quarter, representing a 340 basis point improvement year over year compared with 32.0% in the first quarter.
Adjusted operating income climbed 41% year over year to $733 million in the second quarter, with the adjusted operating margin expanding 350 basis points to reach 28.8%.
Three of the company’s four key business segments posted meaningful margin gains, with Engine Products, Fastening Systems, and Engineered Structures reporting improvements of 470, 90, and 170 basis points, respectively.
Those gains were supported by strong commercial and defense aerospace demand, acquisition contributions, productivity gains, and product rationalization, reflecting broad-based operational strength across the business.
The Forged Wheels segment also contributed positively, posting a 30 basis point margin improvement during the quarter as overall demand conditions remained favorable.
Looking ahead, Howmet expects its adjusted EBITDA margin to land in the range of 30.1% to 30.5% for the full year 2026, with strong pricing and ongoing productivity improvements underpinning that outlook.
Among major peers, RTX Corp. (RTX) saw total costs and expenses increase 12.8% year over year to $22 billion in the second quarter of 2026, generating an operating profit of $2.81 billion during the period.
GE Aerospace (GE) reported a 26.7% year-over-year surge in cost of sales during the second quarter, with operating profit rising 18% but operating margin contracting 130 basis points to 21.7%.
Shares of Howmet have surged 58.6% over the past year, a striking outperformance against the broader industry, which declined 0.6% over the same period.
From a valuation perspective, HWM trades at a forward price-to-earnings ratio of 46.38X, well above the industry average of 32.26X, and the stock carries a Value Score of F.
The Zacks Consensus Estimate for HWM’s 2026 earnings has increased 6.5% over the past 60 days, reflecting growing analyst confidence in the company’s financial trajectory.
Howmet currently carries a Zacks Rank of 2, designated as a Buy, signaling continued optimism among analysts tracking the aerospace components maker.
