Despite a $162 million working capital outflow in 2026Q1, the company generated $359 million in free cash flow, supporting an aggressive capital allocation strategy that included $300 million in share buybacks.
| Cash from Operations | 2.08B | 1.88B | 1.3B | 901M | 733M | 449M | 9M | 461M | 217M | 701M | 873M | 1.58B | 1.67B |
| Operating CF Margin % | - | 22.83% | 17.47% | 13.57% | 12.94% | 9.03% | 0.17% | 6.49% | 1.55% | 5.41% | 7.04% | 12.77% | 13.35% |
| Operating CF Growth % | 245.27% | 45.15% | 44.06% | 22.92% | 63.25% | 4888.89% | -98.05% | 112.44% | -69.04% | -19.7% | -44.82% | -5.5% | - |
| Net Income | 1.74B | 1.51B | 1.16B | 765M | 469M | 258M | 261M | 470M | 642M | -74M | -878M | -197M | 177M |
| Depreciation & Amortization | 288M | 283M | 277M | 272M | 265M | 270M | 280M | 295M | 576M | 974M | 1.32B | 1.86B | 1.84B |
| Stock-Based Compensation | 66M | 0 | 63M | 50M | 54M | 41M | 46M | 69M | 50M | 67M | 86M | 92M | 87M |
| Deferred Taxes | 14M | 17M | 55M | 108M | 79M | 38M | 2M | -19M | 31M | 434M | 1.13B | 34M | -35M |
| Other Non-Cash Items | 96M | 244M | 93M | 51M | 69M | 187M | 82M | 774M | -74M | -84M | 27M | 693M | 733M |
| Working Capital Changes | -124M | -168M | -345M | -345M | -203M | -345M | -662M | -1.13B | -1.01B | -616M | -812M | -905M | -1.13B |
| Change in Receivables | -84M | -109M | -57M | -189M | -161M | -508M | -453M | -1.07B | -1.38B | -463M | -1.11B | -776M | -1.04B |
| Change in Inventory | -111M | -50M | -106M | -142M | -234M | 60M | 74M | -3M | -74M | -192M | -29M | -64M | -355M |
| Change in Payables | 89M | -73M | -49M | -7M | 246M | 144M | -381M | -56M | 339M | 62M | 232M | -90M | 256M |
| Cash from Investing | -309M | -438M | -316M | -215M | -135M | 107M | 271M | 528M | 565M | 540M | -165M | -1.06B | -3.46B |
| Capital Expenditures | -649M | -453M | -321M | -219M | -193M | -199M | -267M | -586M | -768M | -596M | -1.13B | -1.18B | -1.22B |
| CapEx % of Revenue | 7.53% | 5.49% | 4.32% | 3.3% | 3.41% | 4% | 5.08% | 8.26% | 5.48% | 4.6% | 9.08% | 9.52% | 9.72% |
| Acquisitions | -118M | 9M | -5M | 0 | 58M | 0 | 0 | 0 | 0 | 596M | 10M | 97M | -2.38B |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 441M | 0 | 10M | 2M | 0 | 300M | 538M | 1.04B | 1.32B | -348M | 722M | 117M | 282M |
| Cash from Financing | 124M | -1.27B | -1.03B | -868M | -526M | -1.44B | -369M | -1.57B | -649M | -963M | -757M | -441M | 2.25B |
| Debt Issued (Net) | 1.38B | -270M | -365M | -476M | -74M | -847M | 342M | -404M | -510M | -820M | -772M | -145M | 1.15B |
| Equity Issued (Net) | -930M | -754M | -500M | -250M | -400M | -430M | -73M | -1.09B | 16M | 50M | 4M | 25M | 1.21B |
| Dividends Paid | -187M | -181M | -109M | -73M | -44M | -19M | -11M | -57M | -119M | -162M | -228M | -223M | -161M |
| Share Repurchases | -930M | -755M | -500M | -250M | -400M | -430M | -73M | -1.15B | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -140M | -64M | -52M | -69M | -8M | -148M | -627M | -13M | -36M | -31M | 239M | -98M | 47M |
| Net Change in Cash | 1.9B | 178M | -45M | -182M | 70M | -889M | -92M | -579M | 129M | 287M | -56M | 42M | 440M |
| Free Cash Flow | 1.44B | 1.43B | 977M | 682M | 540M | 250M | -258M | -180M | -551M | 105M | -252M | 402M | 455M |
| FCF Margin % | 16.64% | 17.34% | 13.15% | 10.27% | 9.54% | 5.03% | -4.91% | -2.54% | -3.93% | 0.81% | -2.03% | 3.24% | 3.63% |
| FCF Growth % | 41.24% | 46.47% | 43.26% | 26.3% | 116% | 196.9% | -43.33% | 67.33% | -624.76% | 141.67% | -162.69% | -11.65% | - |
| FCF per Share | 3.56 | 3.52 | 2.38 | 1.64 | 1.28 | 0.57 | -0.59 | -0.39 | -1.10 | 0.23 | -0.58 | 0.92 | 1.04 |
| FCF Conversion (FCF/Net Income) | 0.82x | 1.25x | 1.12x | 1.18x | 1.56x | 1.74x | 0.04x | 0.98x | 0.34x | -9.47x | -0.93x | -4.91x | 6.25x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
OEM production bottleneck exposure
According to the provided quarterly data, Howmet's OCF/NI ratio has fluctuated significantly, reaching a low of 0.73 in 2024Q1 and a high of 1.94 in 2023Q4, which highlights the inherent volatility in cash conversion driven by the company's complex, long-cycle manufacturing and inventory-heavy business model.
The divergence between net income and operating cash flow suggests that earnings are frequently impacted by non-cash charges and working capital swings rather than pure cash generation. Investors should monitor whether the recent 0.78 OCF/NI ratio in 2026Q1 represents a structural shift or merely a temporary timing mismatch in revenue recognition versus cash collection.
As reported in financial statements, Howmet's FCF margin has demonstrated notable instability, ranging from a low of 5.2% in 2024Q1 to a peak of 24.4% in 2025Q4, reflecting the lumpy nature of capital expenditures and the impact of working capital requirements on the company's bottom-line cash generation.
While the company maintains strong profitability, the inconsistency in FCF margins suggests that cash flow is highly sensitive to production cadence and inventory management. The recent 15.5% FCF margin in 2026Q1 warrants further investigation to determine if this level is sustainable as the company scales production to meet aerospace demand.
Based on reported figures, Howmet's capital intensity, measured by CapEx as a percentage of revenue, spiked to 15.7% in 2025Q3, significantly above the typical 3-6% range, which may indicate a period of aggressive investment in foundry capacity or specialized manufacturing technologies to support long-term growth.
The elevated capital expenditure levels suggest that management is prioritizing capacity expansion to secure its competitive moat in single-crystal turbine blades. Analysts should assess whether these investments are yielding the expected returns on invested capital or if they represent a necessary, ongoing burden to maintain aging foundry infrastructure.
Analysis of the cash flow statement reveals that working capital changes have been a significant drag on cash flow, with a $162 million outflow in 2026Q1, suggesting that the company is currently absorbing cash to build inventory in anticipation of future aerospace engine production requirements.
The persistent volatility in working capital appears to be a direct consequence of the long lead times inherent in aerospace manufacturing. This trend may indicate that Howmet is effectively acting as a buffer for its OEM customers, though it leaves the company vulnerable to inventory obsolescence if production rates at major OEMs are unexpectedly curtailed.
According to recent SEC filings, Howmet has consistently returned capital to shareholders, with $300 million in share repurchases during 2026Q1 alone, demonstrating a clear commitment to enhancing shareholder value despite the capital-intensive nature of its core aerospace and industrial manufacturing operations.
The aggressive buyback activity, coupled with ongoing dividend payments, suggests management maintains high confidence in the company's long-term cash generation capabilities. However, investors should monitor whether this capital return strategy limits the company's flexibility to respond to potential supply chain disruptions or future technological shifts in engine architecture.
Quick answers to the most common questions about buying HWM stock.
Howmet Aerospace Inc. (HWM) generated $1.88B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Howmet Aerospace Inc. (HWM) generated $1.43B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Howmet Aerospace Inc. (HWM) spent $453.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Howmet Aerospace Inc. (HWM) returned $181.0M to shareholders via cash dividends and spent $755.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.