Oct 29, 2026 earnings call — Raised outlook with strong IGT and aerospace demand
Management expects 2027 growth of 12% plus or minus half a percent, resulting in revenues of approximately $11.5 billion.
Revenue $2.7B (est $2.6B) · EPS $1.46 (est $1.37)
Key quotes
"More recently, we have seen major gas turbine customers state that 2031 is now also sold out, and indeed 2032 will likely be sold out in the next one or two quarters."
"Commercial aerospace growth was very healthy at 32%, with organic growth of 27%, driven by demand for both OE and spares."
"Finally, the share buyback authorization has also been addressed by the board and has been increased by a further $5 billion."
Analyst Q&A 7
Aero blades competition and pricing
Q (Kristine Liwag · Morgan Stanley): How will OEMs insourcing and deals like GE/CPP reshape competition for aerospace blades and vanes? What does it mean for Howmet's market share and pricing power?
A: Management said Howmet has strong, long-standing relationships with major engine customers and has invested years in technology, quality, and capacity. They are poised to further increase capacity for GE (two years to install) and expect multi-year growth into the 2030s; they also expect IGT spares growth to more than offset losing a single first blade business in one year.
"Right now we are actually poised to further increase capacity for GE, which will take two years to install, and then there will be a multi-year runway after that." — John Plant (CEO·CHAIR)
SpaceX insourcing and IGT demand
Q (Seth Seifman · JPMorgan): Could SpaceX insourcing of blades affect the IGT market and Howmet's business?
A: Management described SpaceX's big data center plans and need for power, noting shortages of blades limited turbine availability. They said some turbine makers may supply units without blades and SpaceX might accept lower-rated blades to get power; overall multiple sources (IGT, wind, solar, grid) will be used and added turbine capacity later in the decade should reduce the urgency.
"I think it is important, again, to note that for those cutting-edge data centers, the gross margins on the tokens that you use, like AI tokens, is exceptional." — John Plant (CEO·CHAIR)
Technology edge vs volume growth
Q (Sheila Kahyaoglu · Jefferies): How much of growth comes from technology/content increases versus volume and price? How do supply and demand look now and toward 2030–2040?
A: Management said they keep raising blade performance each engine generation to meet higher temperatures and pressures, which drives content increases. They expect more OE capacity and higher spares demand over the next decade, and plan to hire more engineers and add production capacity to stay at the technology forefront.
"I expect that we'll see, during the next decade, the further capacity that's going to be required for OE, further capacity that's going to be required to service these, I'll say, new fleet of engines and their improvements." — John Plant (CEO·CHAIR)
Defense demand and inventory replenishment
Q (John Godyn · Citi): Can you update the outlook and scale of opportunity in the defense portfolio, given strong demand but no inventory replenishment in guidance?
A: Management said defense clarity is limited today and much depends on the U.S. defense budget and post-midterm congressional actions. They are engaging primes and newer defense companies and preparing for production, expecting defense sales to be up in 2027 though final scale awaits budget definitization and multi-year contract agreements.
"We have been spending a lot of time with the existing large primes and indeed some of the, I will say, newer defense companies, getting ready for really putting that into production." — John Plant (CEO·CHAIR)
IGT margins and capacity timing
Q (Doug Harned · Bernstein): When will the next tranches of IGT contracts and capacity needs come in, and how should margins trend for IGT versus aero?
A: Management said IGT and aerospace margins are roughly similar today, and continued IGT growth would give some leverage versus fixed costs. They plan further investment in 2027 and elevated CapEx into 2028 while capacitating for 2030s demand and new product introductions.
Timing of IGT product and capex plans
Q (Doug Harned · Bernstein): Given IGT's fast growth and limited supply, when do future contract tranches start and how do you plan capex and product introductions?
A: Management said they are already discussing additional capacity and new product development, noting an example of a new large IGT blade program that doesn't start until 2031. They expect continued investment this year, higher investment in 2027, and likely elevated capital spending into 2028 while reevaluating as revenue visibility develops.
"In fact, this week it was looking at a new product introduction for a particularly sophisticated type of large IGT blade for a customer that doesn't start until 2031." — John Plant (CEO·CHAIR)
How to justify big upfront investments
Q (Ron Epstein · BofA): How do you get comfortable making big early investments now and believe demand will still be there by 2030?
A: Management said they evaluate broad demand drivers: data center build-out, future chip and cooling needs, LNG and compressors, pipelines, and climate-driven electricity demand. They balance those market views with customer contracts and try not to over-capacitize; they noted rapid company expansion with many new plants and hires to meet present demand.
"We're probably now at seven new manufacturing plants and considering three more." — John Plant (CEO·CHAIR)