Howmet Aerospace (HWM) just gave investors exactly what they wanted: record results, aggressive acquisitions, and an optimistic outlook that sent shares soaring over 8% to a fresh 52-week high.

The aerospace parts supplier reported fourth-quarter revenue of $2.168 billion on Thursday, marking a 15% jump from last year. Net income came in at $372 million, or 92 cents per share, compared to $314 million, or 77 cents per share, in the prior year period. But the real story was in the adjusted numbers: EPS of $1.05 handily beat Wall Street's $0.97 estimate, while sales topped the $2.125 billion consensus.

The margins tell an even better story. Operating income margin hit 22.6%, while adjusted EBITDA climbed 29% to $653 million with a record margin of 30.1%. That's a 330 basis point improvement year over year, the kind of operational leverage that makes investors sit up and pay attention.

Business Segments Firing on All Cylinders

Engine Products, the company's largest division, led the charge with revenue surging 20% year over year to $1.163 billion. The segment posted adjusted EBITDA of $396 million with a robust 34.0% margin.

Fastening Systems grew 13% to $454 million in revenue, generating $139 million in adjusted EBITDA at a 30.6% margin. Engineered Structures revenue increased 4% to $287 million with $63 million in EBITDA and a 22.0% margin. Even Forged Wheels contributed solid growth, up 9% to $264 million with $79 million in EBITDA at a 29.9% margin.

Pension Settlement and Strong Cash Generation

The quarter included roughly $54 million in net charges from special items, primarily tied to a non-cash settlement charge for annuitizing the remainder of the company's U.K. pension plan. On December 1, 2025, Howmet reduced its gross pension obligation by approximately $125 million, triggering a non-cash settlement charge of about $89 million.

Despite those charges, cash generation remained strong. The company generated $654 million in cash from operations and $530 million in free cash flow during the quarter. Howmet returned capital to shareholders by repurchasing $200 million of common stock and paying a $0.12 per share dividend.

Full-Year Performance and Financial Position

For full-year 2025, revenue climbed 11% to $8.3 billion. Net income reached $1.5 billion, or $3.71 per share, compared to $1.2 billion, or $2.81 per share, in 2024. Adjusted EPS came in at $3.77, while cash from operations totaled $1.9 billion and free cash flow hit $1.4 billion.

The balance sheet looks solid as of December 31, 2025, with cash and cash equivalents of $742 million and total debt of $3.05 billion.

Dealmaking Mode: Two Acquisitions in Two Months

Howmet isn't sitting still. On December 22, 2025, the company entered into a definitive agreement to acquire Consolidated Aerospace Manufacturing, LLC from Stanley Black & Decker for approximately $1.8 billion in cash. That transaction is expected to close in the first half of 2026.

More recently, on February 6, 2026, Howmet acquired Brunner Manufacturing Co. Inc., a small, privately-held producer of high-quality fastener products based in Mauston, Wisconsin, in an all-cash deal.

The company's capital allocation remains shareholder-friendly. In Q4 2025, it repurchased $200 million of common stock at an average price of $194.61 per share, retiring approximately 1.0 million shares. As of February 12, 2026, total share repurchase authorization available stood at approximately $1.347 billion.

CEO Sees Data Centers as Unexpected Growth Driver

Executive Chairman and CEO John Plant offered an upbeat assessment of the company's end markets. "Turning to 2026, the vast majority of the markets we serve are in a growth phase, while the commercial transportation market shows signs of stabilizing," Plant stated.

He continued: "Defense markets are also very healthy, while engine spares continue to grow to support the expanding aircraft fleet. The gas turbines business is entering its largest growth phase in years, with extremely high demand for electricity generation, especially from natural gas for data centers. In commercial transportation, we anticipate that the first quarter 2026 will be the quarterly low point and then we will begin to see healthy demand in the second half of 2026. Howmet is well positioned for growth in 2026 and beyond."

That data center angle is worth noting. As AI computing demands explode, the power infrastructure to support massive server farms is becoming a growth driver for industrial suppliers in unexpected ways.

Guidance Points to Continued Momentum

Howmet forecast first-quarter 2026 revenue of $2.225 billion to $2.245 billion and adjusted EPS of $1.09 to $1.11, comfortably above analyst estimates of $2.162 billion and $1.02.

For the full fiscal year 2026, the company expects revenue of $9.000 billion to $9.200 billion, compared to the $9.151 billion consensus estimate, and adjusted EPS of $4.35 to $4.55 versus the $4.47 estimate. Management noted that fiscal 2026 revenue is projected to rise approximately 10%, with profit and cash generation expected to improve.

HWM Price Action: Howmet Aerospace shares traded up 8.47% at $250.39 at the time of publication on Thursday, hitting a new 52-week high.