Howmet CEO: Gas turbine market has been 'biggest change to my thinking'

Howmet’s key customers are GE Vernova, Siemens Power, Mitsubishi Heavy, Ansaldo Solar and Baker Hughes, as well as GE Aviation for some aeroderivative engines.

“We have recently completed new contracts with four of these seven customers, while negotiations continue with the other three,” John Plant, executive chairman and CEO, said during the company’s fourth quarter earnings call. “Additionally, the build-out of the turbine fleet over the next five years ensures a healthy and growing spares market for years to come.”

The gas turbine market has been “the biggest change to my thinking,” Plant told analysts.

“If you would have gone back five to seven years, I’d say this was a more cyclical business,” Plant said. “It had shown periods of rapid growth and rapid decline, and it was one where I was quite leery about making investments in that segment.”

The segment became more consistent as demand from renewable energy grew. Now, data centers are fueling demand for electricity derived from natural gas. Howmet increased its investments in equipment in 2024 and 2025.

Given that Engine Products is already Howmet’s largest segment by revenue, the projected acceleration in gas turbines suggests further portfolio concentration, potentially diminishing the relative weight of more aluminum-intensive operations such as forged wheels.

“Now, we’re looking at 2026, where it’s going to be a higher number again, and we’ve picked the midpoint of about $470 million,” Plant said. “But I could envisage it rising above that.”

By aggregating both large gas turbines and small- to medium-sized gas turbines, Howmet expects its base business of about $1 billion to double in revenue to $2 billion over the next three to five years.

Acquisitions

In the past few months, Howmet snapped up some fastener businesses.

In December, Howmet bought Consolidated Aerospace Manufacturing LLC, a global designer and manufacturer of precision fasteners, fluid fittings, and other products for aerospace and defense, from Stanley Black & Decker Inc. The deal is valued at $1.8 billion.

Howmet recently closed on the purchase of Brunner Inc., a fastener business in Wisconsin. The deal represents a capital range of $120 million to $150 million.

Financials

Overall, the company said most of its markets – commercial aerospace, defense, and land-based gas turbines – are in a growth phase. Commercial transportation is stabilizing.

Howmet reported record full-year 2025 revenue of $8.3 billion, up 11% year over year, driven by growth in the commercial aerospace market of 12%, growth in the defense aerospace market of 21%, and growth in the gas turbines market of 25%, partially offset by declines in the commercial transportation market of 5%.

Net Income was $1.5 billion, or $3.71 per share, in 2025 versus $1.2 billion, or $2.81 per share, in 2024.