Howmet Aerospace Inc

Strong Q1 performance vs guidance (and margin expansion): Howmet delivered $2.31B revenue, $740M EBITDA and $1.22 EPS in 1Q 2026. EBITDA margin was 32%, up +320 bps YoY (record), with EBITDA up 32% vs revenue up 19%; incremental flow-through cited at ~49%. Free cash flow (FCF) was $359M (record for a first quarter) on strong working-capital efficiency.

Cash deployment: buybacks + dividends + leverage still pressured by M&A (but improving): Company repurchased $300M in Q1 (avg $230) and another $150M in April (avg $246); 20 consecutive quarters of repurchases. Board authorization remaining: ~$1.05B. Dividend: $0.12/share in Q1 and management expects 2026 dividend $ > 2025 (higher $ payout). Balance sheet: ended Q1 with $2.4B cash and cited net leverage improving to 0.9x prior to CAM closing, but after CAM (closed April 6) leverage was ~1.6x with expectation to reduce meaningfully through the year.

Portfolio moves (surprising/important): CAM + Brunner acquired; disk forging divested: - CAM Fastener acquisition closed April 6 for ~$1.8B, funded by $1.65B new debt plus use of disposal proceeds; weighted avg cost of debt ~4.2%. - Brunner acquired Feb 6 for ~$120M cash (integration on track). - Savannah U.S. Disk operation sold March 31 for $230M cash (expected margin-accretive to Structures). - Management estimates these deals add ~$275M revenue and ~$60M EBITDA for the remainder of 2026; EPS impact in 2026 ~insignificant due to higher interest expense, with positive EPS impact expected starting 2027.