Adds commentary from conference call

By Allison Lampert, Utkarsh Shetti

Feb 13 (Reuters) - Howmet Aerospace HWM.N forecast better than-expected first-quarter revenue and profits on strong aircraft demand, but the castings giant is taking a conservative outlook for 2025 as planemakers wrestle with delays and possible tariffs.

Howmet shares dipped 2.7% in midday trade after the company forecast 2025 revenue to be slightly below estimates, setting a cautious tone for the year.

Passengers' appetite for travel has led airlines to expand their fleets, leading planemakers to accelerate production even as a shortfall of aircraft keeps older jets flying longer. That's benefited aerospace suppliers like Howmet whose shares more than doubled in 2024 and gained about 15% so far this year.

But production challenges faced by Boeing BA.N and Airbus AIR.PA have led jet output to fall below company targets, as the U.S. planemaker wrestles with a series of crises, including a mid-air blowout in 2024.

“It would probably have been fairly easy for us to have been a little bit more optimistic but at the same time there’s lots of things going on during 2025” CEO John Plant told analysts.

From supply chain challenges to Boeing's plans for higher narrowbody output, and the prospect of the U.S. imposing 25% tariffs on key metals for planes , the aerospace sector faces uncertainty.

Boeing, whose 737 MAX output slumped last year following a mid-air blowout on a near new model, has said it would likely go above a U.S. regulator-imposed rate cap of 38 a month this year.

Howmet said its guidance assumes Boeing produces about 25 737 MAX jets and six 787 Dreamliner planes per month on average across 2025. It sees Airbus averaging output in the mid-50s per month on the A320 and approximately six per month on its A350 widebody jet.

Plant said Howmet would meet higher Boeing production of its strongest-selling 737 jet if it happens.

“Of course should Boeing build at rate 38 or 42 we will match this,” Plant said.

However he cautioned that the U.S. planemaker could always cut back on its supply chain, following recent remarks by CFO Brian West on Boeing's amassed $87.5 billion in inventory levels being "too much."

Plant added Howmet was well positioned to handle the risk of 25% U.S. tariffs on foreign steel and aluminum or other duties floated by U.S. President Donald Trump, noting the company will pass on additional costs to customers.

Pennsylvania-based Howmet expects first-quarter revenue between $1.925 billion and $1.945 billion, the midpoint of which is above analysts' estimates of $1.918 billion, according to data compiled by LSEG.

It expects first-quarter adjusted earnings between 75 cents and 77 cents per share, ahead of estimates of 72 cents.

For 2025, it expects free cash flow, a metric closely watched by investors, to exceed $1 billion.

Howmet sees 2025 revenue between $7.93 billion and $8.13 billion, the midpoint of which is marginally shy of expectations.

It expects adjusted profit per share for the year to be between $3.13 and $3.21. Analysts had expected $3.21.

For the fourth quarter ended December 31, the company's overall sales rose 9% to $1.89 billion, above estimates of $1.88 billion.

(Reporting by Anandita Mehrotra and Utkarsh Shetti in Bengaluru and Allison Lampert in Montreal; Editing by Shailesh Kuber, Emelia Sithole-Matarise and Nick Zieminski)

((Anandita.Mehrotra@thomsonreuters.com;))