By Allison Lampert and Utkarsh Shetti
(Reuters) -Howmet Aerospace raised its 2025 profit forecast on Thursday, despite impacts from U.S. tariffs, sending shares up 7.8% as the maker of castings and fasteners expects to pass on higher costs and sees strong demand from increased jet production.
The U.S. aerospace industry is seeking a tariff exemption to alleviate rising production costs and supply-chain strain, but strong demand for parts continues to support some suppliers such as Howmet and Honeywell.
Demand for parts remains strong since makers of engines and planes have record-large backlogs, but North American airline traffic has slowed due to economic uncertainty fueled by tariffs, Howmet CEO John Plant said.
Carriers from China have pushed back against taking higher-priced Boeing aircraft due to tariffs, with the CEO of European budget carrier Ryanair on Thursday threatening to cancel orders for hundreds of the U.S. planemaker’s jets if duties raise prices.
“Could I envisage that certain airlines might begin to cancel aircraft in the coming year? Well I think it’s possible, but that very much depends upon really what the passenger traffic is,” Plant told analysts on a call.
Plant said Howmet wrote to its customers declaring a force majeure event – an extraordinary circumstance that makes it impossible to fulfill a contract – confirming a Reuters report that the company could halt some shipments if they are affected by tariffs announced by U.S. President Donald Trump.
“Clearly we want to protect Howmet,” Plant said. He added that while the company has certain contract provisions to protect pricing, in certain cases tariffs are not specified.
Plant said Howmet has been booking $20 million to $30 million worth of additional orders, and has hundreds of parts yet to quote, after a major fire at the rival SPS Technologies factory near Philadelphia in February hit supply of fasteners.
He said SPS parent company Precision Castparts Corp will reallocate some of the production capacity lost in the fire to their other sites.
“We’re going to hopefully have a slice of what remains,” Plant said. “It’s pretty difficult to take all of that production and move it in-house, because nobody sits there with that capacity.”
The Pittsburgh-based supplier to planemakers Boeing and Airbus in February forecast better-than-expected first-quarter revenue and profits on strong aircraft demand, but had given a conservative outlook for 2025 due to tariffs.
The updated outlook, which includes current assumptions on tariff impacts, projects adjusted profit per share between $3.36 and $3.44, up from the previous forecast of $3.13 to $3.21.
Its adjusted profit per share for the quarter was 86 cents, surpassing Wall Street expectations of 78 cents.
(Reporting By Allison Lampert in Montreal, Utkarsh Shetti and Anandita Mehrotra in Bengaluru; Editing by Vijay Kishore and Rod Nickel)
