HWM
Howmet Aerospace INC
NYSE
8-K: Howmet Aerospace Soars with Record 2024 Results, Raises 2025 Guidance
Sentiment:
Earnings Release
13 February 2025 7:05 AM
Howmet Aerospace reports a strong finish to 2024 with record revenue, profit, and cash generation, and raises its revenue growth guidance for 2025.
Better than expected
The company exceeded the high end of its previous guidance.
Revenue, net income, and adjusted EBITDA all showed significant year-over-year growth.
The company raised its revenue growth guidance for 2025.
Summary
- Howmet Aerospace reported its fourth quarter and full year 2024 financial results on February 13, 2025.
- The company's full year revenue reached $7.4 billion, a 12% increase year-over-year, driven by a 20% increase in the commercial aerospace market.
- Net income for the full year was $1.2 billion, or $2.81 per share, compared to $765 million, or $1.83 per share, in 2023.
- Adjusted EBITDA for the full year, excluding special items, was $1.9 billion, up 27% year-over-year.
- Free cash flow for the year was $977 million, representing an 88% conversion of net income excluding special items.
- The company deployed approximately $975 million for common stock repurchases, debt reduction, and dividends in 2024.
- Howmet Aerospace is raising its revenue growth guidance for 2025 to approximately 8% year-over-year.
- The company expects free cash flow in 2025 to exceed $1 billion, with approximately 85% conversion of net income.
- In the fourth quarter, Howmet repurchased $190 million of common stock at an average price of $109.75 per share.
- The company increased its quarterly dividend by 25% to $0.10 per share in the first quarter of 2025.
Sentiment
Score: 9
Explanation: The document presents a highly positive outlook with record results, increased guidance, and strong cash flow generation; the company's strategic focus on growth markets and shareholder returns contributes to the positive sentiment.
Positives
- Record revenue, profit, and cash generation in 2024 indicate strong operational performance.
- Significant growth in the commercial aerospace market is driving revenue increases.
- The company is effectively managing its capital, deploying funds for stock repurchases, debt reduction, and dividends.
- Increased dividend payout demonstrates confidence in future cash flows and commitment to shareholder returns.
- Raised revenue growth guidance for 2025 suggests continued positive momentum.
- Strong free cash flow generation provides financial flexibility for future investments and shareholder returns.
- Engine Products reported full year 2024 revenue of $3.7 billion, up 14% year over year.
- Fastening Systems reported full year 2024 revenue of $1.6 billion, up 17% year over year.
- Engineered Structures reported full year 2024 revenue of $1.1 billion, up 21% year over year.
Negatives
- Forged Wheels reported full year 2024 revenue of $1.1 billion, down 8% year over year, due to lower volumes in the commercial transportation market.
- The commercial transportation market is anticipated to be soft until the second half of 2025.
Risks
- The company's guidance assumes specific production rates for Boeing and Airbus, which could impact results if these rates are not achieved.
- The commercial transportation market is expected to be soft until the second half of 2025, potentially impacting the Forged Wheels segment.
- The document mentions several general economic and geopolitical risks that could affect future performance, including cyber attacks, supply chain disruptions, and geopolitical tensions.
Future Outlook
Howmet Aerospace expects continued growth in the defense aerospace and industrial end markets, with the commercial transportation market anticipated to be soft until the second half of 2025; the mid-point of 2025 revenue growth guidance is increased to approximately 8% year over year compared to the 7.5% outlook provided at third quarter 2024 earnings.
Management Comments
- Howmet drove a healthy set of results to close out the year, exceeding the high end of guidance.
- Robust cash generation continues to support Howmets strong balance sheet as well as an attractive shareholder return profile.
- The outlook for commercial aerospace remains solid with rising OEM production rates supported by strong demand as well as continued healthy growth in engine spares demand.
Industry Context
The strong performance in the commercial aerospace market aligns with the broader industry trend of increased demand and rising OEM production rates; the company's focus on advanced engineered solutions positions it well to capitalize on this growth.
Comparison to Industry Standards
- Howmet's performance can be compared to other aerospace component manufacturers such as RTX Corporation (formerly Raytheon Technologies) and Safran S.A.
- The 27% increase in Adjusted EBITDA and 12% increase in revenue are strong compared to industry averages, suggesting Howmet is outperforming some of its peers.
- The company's focus on commercial aerospace growth mirrors the strategies of other major players in the industry.
Stakeholder Impact
- Shareholders will benefit from increased dividends and share repurchases.
- Employees may benefit from the company's growth and profitability.
- Customers will benefit from the company's continued investment in advanced engineered solutions.
- Creditors will benefit from the company's strong balance sheet and cash flow generation.
Next Steps
- The company will hold its quarterly conference call on February 13, 2025.
- Howmet Aerospace intends to make future announcements regarding Company developments and financial performance through its website.
Key Dates
- November 8, 2024: Record date for Q4 2024 dividend.
- November 25, 2024: Payment date for Q4 2024 dividend of $0.08 per share.
- January 27, 2025: Board of Directors approved a 25% increase in the common stock dividend.
- January 31, 2025: Total share repurchase authorization available was approximately $2.15 billion.
- February 7, 2025: Record date for Q1 2025 dividend.
- February 13, 2025: Date of the earnings release and conference call.
- February 25, 2025: Payment date for Q1 2025 dividend of $0.10 per share.
Keywords
Howmet Aerospace, financial results, revenue, EBITDA, earnings per share, free cash flow, aerospace, dividends, stock repurchase, guidance
HWM
Howmet Aerospace INC
NYSE
Sector: Industrials
Filings with Classifications
Better than expected
1 May 2025 4:42 PM
Quarterly Report
- Sales increased by 6% year-over-year.
- Net income increased significantly from $243 million to $344 million.
- Earnings per share increased from $0.59 to $0.84.
- Segment Adjusted EBITDA increased from $460 million to $580 million.
Better than expected
1 May 2025 7:00 AM
Quarterly Report
- The company reported record first quarter revenue.
- The company reported better than expected adjusted EBITDA.
- The company reported better than expected adjusted EPS.
- The company increased full year guidance.
Better than expected
16 April 2025 4:46 PM
Proxy Statement
- The company's revenue, net income, adjusted EBITDA, and free cash flow all increased year-over-year.
Delay expected
13 February 2025 5:35 PM
Annual Results
- Quality control issues at Boeing have negatively impacted, and are expected to negatively impact, narrow body and wide body production rates in the near term.
- A labor union work stoppage and ensuing production restart at Boeing has negatively impacted results.
Better than expected
13 February 2025 7:05 AM
Earnings Release
- The company exceeded the high end of its previous guidance.
- Revenue, net income, and adjusted EBITDA all showed significant year-over-year growth.
- The company raised its revenue growth guidance for 2025.
Better than expected
6 November 2024 5:42 PM
Quarterly Report
- The company's sales and net income significantly exceeded the previous year's results.
- The company's earnings per share were substantially higher than the previous year.
- The company's Segment Adjusted EBITDA margins improved across multiple segments.
Better than expected
6 November 2024 7:07 AM
Quarterly Report
- The company's results exceeded the high end of guidance for Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted earnings per share.
- The company reported a 11% year-over-year revenue increase, driven by strong commercial aerospace growth.
- Net income and earnings per share showed significant improvement compared to the previous year.
- Adjusted EBITDA and margins increased substantially, indicating improved profitability.
Better than expected
22 August 2024 4:10 PM
Debt Offering Announcement
- The company is expected to reduce its annual interest expense by approximately $21 million due to the refinancing.
Capital raise
22 August 2024 4:10 PM
Debt Offering Announcement
- Howmet Aerospace has completed a $500 million public offering of 4.850% notes due in 2031.
Capital raise
8 August 2024 4:37 PM
Debt Offering Announcement
- Howmet Aerospace is raising $500 million through a debt offering of 4.850% Notes due 2031.
- The proceeds will be used to redeem approximately $577 million of its 6.875% Notes due 2025, with the remainder coming from cash on hand.
Capital raise
8 August 2024 9:25 AM
Debt Offering Announcement
- Howmet Aerospace is proposing an offering of senior notes.
- The proceeds from this offering will be used to redeem existing debt and for general corporate purposes.
Better than expected
30 July 2024 5:18 PM
Quarterly Report
- The company's sales and net income exceeded expectations due to strong demand in the aerospace sector.
- The company's cost of goods sold as a percentage of sales decreased more than expected, contributing to higher profitability.
- The company's debt reduction and refinancing activities resulted in lower interest expenses than anticipated.
Better than expected
30 July 2024 7:05 AM
Quarterly Report
- The company exceeded the high end of guidance on all fronts.
- The company reported record quarterly revenue, adjusted EBITDA, adjusted EBITDA margin, and adjusted earnings per share.
- The company raised full year 2024 guidance above the second quarter beat.
Better than expected
2 May 2024 4:31 PM
Quarterly Report
- The company's net income, sales, and earnings per share all significantly exceeded the prior year's results, indicating better than expected performance.
- The company's Segment Adjusted EBITDA increased across all segments, demonstrating strong operational performance.
- The company's effective tax rate was lower than the prior year, contributing to the improved net income.
Capital raise
2 May 2024 4:31 PM
Quarterly Report
- The company established a commercial paper program under which it may issue unsecured commercial paper notes up to a maximum aggregate face amount of $1,000 million.
- The company is evaluating whether, when, and to what extent it may access capital markets, including any plans to refinance the 5.125% Notes due October 2024 and the 6.875% Notes due May 2025.
Capital raise
2 May 2024 7:05 AM
Quarterly Report
- The company established a commercial paper program, under which the Company may issue unsecured commercial paper notes up to a maximum aggregate face value amount of $1 billion outstanding at any time.
Better than expected
2 May 2024 7:05 AM
Quarterly Report
- The company's results exceeded the high end of guidance on all metrics.
- The company achieved record quarterly results in revenue, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted earnings per share.
- The company generated positive free cash flow in the first quarter for the first time.
Better than expected
8 April 2024 12:59 PM
Proxy Statement
- The company's revenue, net income, adjusted EBITDA, and free cash flow all increased year-over-year.
Capital raise
4 April 2024 4:30 PM
Debt Issuance Announcement
- Howmet Aerospace has established a commercial paper program to issue up to $1 billion in unsecured notes.
- The proceeds from the notes will be used for general corporate purposes.
Better than expected
13 February 2024 5:05 PM
Annual Results
- The company's sales increased by 17% and income before income taxes increased by 61% compared to 2022, indicating better than expected financial performance.
Better than expected
13 February 2024 7:05 AM
Quarterly Report
- The company exceeded the high end of its guidance range for revenue, adjusted EBITDA, adjusted earnings per share, and free cash flow.
- The company reported record net income and cash from operations for the full year 2023.
- The company's revenue growth of 17% year-over-year was strong, driven by a 24% increase in the commercial aerospace sector.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.