Howmet Aerospace, a key supplier of parts for jet engines and industrial gas turbines, raised its 2026 profit and revenue forecasts on Thursday after a blowout third quarter. The company's results underscore how two powerful trends—rebounding air travel and the build-out of data centers—are converging to drive demand for its products.
Strong quarter, brighter outlook
Howmet, based in Pittsburgh, reported adjusted earnings of $1.46 per share for the third quarter, a 54% jump from the same period a year earlier and ahead of the $1.37 that analysts had expected, according to LSEG data. Revenue climbed 29% to $2.70 billion, also beating forecasts.
The company's gas turbine business was a standout, with revenue up 45% from a year ago. Gas turbines are used to generate electricity, and they are increasingly being deployed to power the massive data centers that support artificial intelligence and cloud computing. That surge helped offset any concerns about a slowdown in other areas.
Howmet also pointed to a large order backlog for commercial aircraft that stretches "throughout 2027 and beyond," as airlines and defense customers ramp up production. The company makes castings, fasteners, and other components that go into jet engines and airframes, so its results are a bellwether for the broader aerospace supply chain.
Why it matters for investors
For everyday investors, Howmet's update is a signal that demand for aerospace parts remains robust, even as some other industrial sectors show signs of cooling. The company's ability to raise its 2026 guidance suggests management sees this strength continuing well into the future.
The jump in gas turbine revenue is particularly notable because it ties Howmet to the data center boom, which has been a major driver of growth for companies like Linde, which saw AI chip demand lift its electronics sales. Data centers require enormous amounts of electricity, and gas turbines are a flexible way to meet that demand, especially as renewable sources like wind and solar can be intermittent.
Howmet's results also come at a time when other industrial companies are sending mixed signals. For example, Caterpillar beat estimates but offered a flat outlook, highlighting the uneven nature of the industrial recovery. Howmet's raised guidance stands out as a positive data point.
What to watch next
Investors will be watching whether Howmet can maintain its momentum. The company's backlog provides visibility, but supply chain constraints and labor shortages have been persistent challenges for the aerospace industry. Any disruption could affect how quickly Howmet can convert that backlog into sales.
Another key factor is the pace of data center construction. If the AI-driven build-out slows, demand for gas turbines could soften. However, for now, Howmet's raised outlook suggests that both the aerospace and energy segments are firing on all cylinders.
Howmet's performance also bodes well for other companies in the aerospace supply chain. As Henkel lifted its 2026 sales outlook on pricing power, and Magnum raised its outlook after a hot summer, the trend of companies upgrading guidance is a positive sign for the broader economy.
For investors, Howmet's report is a reminder that companies with exposure to multiple growth engines—in this case, aviation and data centers—can be well-positioned to weather economic uncertainty. As always, it's important to consider how a company's results fit into your overall portfolio and risk tolerance.
