Adds CEO comment from analyst call, background in paragraphs 4, 7-10; share move, paragraph 2

By Aatreyee Dasgupta and Allison Lampert

May 7 (Reuters) - Howmet Aerospace HWM.N on Thursday reported first-quarter profit and revenue above Wall Street estimates and significantly raised its annual forecast on strong growth in its aerospace and gas turbine businesses.

Howmet shares were up more than 6% in midday trade.

However, the U.S. maker of parts like castings and fasteners used on airplanes, urged caution due to uncertainty from the Iran war, which has disrupted transport and driven up fuel costs, weakening some carriers' balance sheets.

“There may be an effect to be felt from the Iranian conflict,” Howmet CEO John Plant told analysts.

U.S. aerospace suppliers are gaining from robust demand as Boeing BA.N and Airbus AIR.PA ramp up aircraft production. At the same time, governments worldwide are boosting defense spending, with conflicts in Ukraine and Iran draining missile stockpiles.

While demand for spare parts, like RTX Corp's RTX.N Pratt & Whitney Geared Turbofan engines remains strong, output in both the commercial and defense sectors has been limited by supply-chain challenges.

Plant said GTF engine volumes were still relatively low in the first quarter but are ramping up, with output set to rise in 2026 and accelerate next year. He expects production to transition from legacy GTF engines to the higher-value GTF Advantage models over the year.

Plant also said Howmet has increased its inventory of rare earths used in the aerospace and defense sectors, ensuring the company is covered this year and in 2027.

Some aerospace company executives are hoping a meeting scheduled this month between U.S. President Donald Trump and China's President Xi Jinping will alleviate trade tensions and shortages of Chinese-produced rare earths like yttrium, which are used in production.

"It's been a major push to increase security around rare earths," Plant said.

The Pittsburgh-based company now expects 2026 revenue of $9.58 billion to $9.73 billion, up from its prior view of $9 billion to $9.2 billion.

The company raised it 2026 earnings forecast to $4.88 to $5.00 per share, from $4.35 to $4.55 previously, well ahead of analysts' current estimate of $4.64.

The midpoint of its new annual adjusted profit forecast lies at $4.94 per share, compared with a midpoint of $4.45 previously expected.

Quarterly adjusted profit rose 42% from a year ago to $1.22 per share, compared with analysts' estimates of $1.11 per share, according to data compiled by LSEG.

Revenue for the three months ended March 31 rose 19% to $2.31 billion, beating estimates of $2.24 billion.