HWM
Howmet Aerospace INC
NYSE
8-K: Howmet Aerospace Soars with Record Q1 Revenue and Increased Full-Year Guidance
Sentiment:
Quarterly Report
1 May 2025 7:00 AM
Howmet Aerospace reports record first-quarter revenue, driven by commercial aerospace growth, and raises its full-year guidance for adjusted EBITDA, adjusted EPS, and free cash flow.
Better than expected
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.
Summary
- Howmet Aerospace reported record revenue of $1.94 billion for the first quarter of 2025, a 6% increase year-over-year.
- The growth was primarily driven by a 9% increase in the commercial aerospace market.
- Net income for the quarter was $344 million, or $0.84 per share, compared to $243 million, or $0.59 per share, in the first quarter of 2024.
- Adjusted EBITDA excluding special items was $560 million, up 28% year-over-year, with a margin of 28.8%, up 480 basis points.
- Adjusted earnings per share excluding special items was $0.86, up 51% year-over-year.
- The company generated $134 million in free cash flow.
- Howmet Aerospace repurchased $125 million of common stock in the first quarter and an additional $100 million in April.
- The company increased its quarterly dividend to $0.10 per share, up 100% year-over-year.
- Full-year 2025 guidance includes a widened revenue range and increased expectations for adjusted EBITDA, adjusted EPS, and free cash flow.
- The company expects revenue between $7.88 billion and $8.18 billion, adjusted EBITDA between $2.225 billion and $2.275 billion, adjusted EPS between $3.36 and $3.44, and free cash flow between $1.1 billion and $1.2 billion.
Sentiment
Score: 9
Explanation: The document presents a highly positive outlook with record revenue, increased profitability, strong cash flow, and an upgraded credit rating. The company's management expresses confidence in future growth, and the overall tone is optimistic.
Positives
- Record first-quarter revenue driven by strong growth in commercial aerospace.
- Significant increase in adjusted EBITDA and adjusted EPS.
- Strong free cash flow generation.
- Increased dividend payout to shareholders.
- Credit rating upgrade by Fitch Ratings.
- Share repurchases demonstrate confidence in the company's value.
- Positive outlook for commercial and defense aerospace markets.
Negatives
- Forged Wheels revenue decreased by 13% year-over-year due to lower volumes in the commercial transportation market.
- The commercial transportation market faces uncertainty due to tariffs and economic conditions in North America.
- Tariff-related and economic uncertainty may moderate North American traffic growth.
Risks
- Deterioration in global economic and financial market conditions.
- Potential cyber attacks and information technology or data security breaches.
- Loss of significant customers or adverse changes in customer business or financial conditions.
- Manufacturing difficulties or other issues that impact product performance, quality, or safety.
- Inability of suppliers to meet obligations due to supply chain disruptions.
- Failure to attract and retain a qualified workforce and key personnel.
- Geopolitical, economic, and regulatory risks relating to Howmet Aerospaces global operations.
Future Outlook
Howmet Aerospace has widened its full-year 2025 revenue guidance and increased its expectations for adjusted EBITDA, adjusted EPS, and free cash flow, reflecting confidence in continued growth in the aerospace market and strong performance across its segments.
Management Comments
- The Howmet team delivered a solid start to 2025, setting quarterly records in revenue, Adjusted EBITDA*, Adjusted EBITDA margin*, and Adjusted Earnings Per Share* while exceeding all aspects of our baseline guidance.
- Margin progression within the Fastening Systems and Engineered Structures segments was particularly noteworthy.
- Free cash flow was deployed with a $0.10 per share common stock dividend, up 25% from the prior quarter, $125 million of common stock repurchases in the first quarter 2025, and an additional $100 million of repurchases in April.
- Howmet Aerospaces strong balance sheet continues to be recognized by the rating agencies, with Fitch upgrading its debt rating on the Company to BBB+, three notches into Investment Grade.
Industry Context
Howmet Aerospace's strong performance is aligned with the continued growth in the commercial aerospace market, driven by increasing air passenger traffic and demand for new, fuel-efficient aircraft. The company also expects healthy growth in the defense aerospace market and industrial gas turbine sector, positioning it well to capitalize on these trends.
Comparison to Industry Standards
- Howmet's adjusted EBITDA margin of 28.8% is competitive with other leading aerospace component manufacturers.
- Companies like TransDigm Group and HEICO Corporation, known for their high margins, serve as benchmarks in the industry.
- The upgrade to BBB+ by Fitch Ratings places Howmet in a strong investment-grade category, similar to peers like Boeing and Airbus.
- The company's focus on commercial aerospace aligns with the industry's growth trajectory, as seen in the performance of companies like RTX (formerly Raytheon Technologies) and Safran.
Stakeholder Impact
- Shareholders will benefit from increased dividends and share repurchases.
- Employees may see increased job security and potential for career advancement due to the company's growth.
- Customers can expect continued innovation and high-quality products.
- Suppliers may experience increased demand for their products and services.
- Creditors benefit from the company's improved credit rating and strong financial performance.
Next Steps
- The company will hold its quarterly conference call on May 1, 2025.
- A quarterly dividend of $0.10 per share will be paid on May 27, 2025, to shareholders of record as of May 9, 2025.
- The company will continue to monitor market conditions and adjust its guidance as necessary.
Key Dates
- February 25, 2025: Company paid a quarterly dividend of $0.10 per share.
- March 31, 2025: Fitch Ratings upgraded Howmet Aerospaces Long-Term Issuer Default Rating from BBB to BBB+.
- May 1, 2025: Date of the earnings release and conference call.
- May 9, 2025: Record date for the upcoming quarterly dividend.
- May 27, 2025: Date of payment for the upcoming quarterly dividend.
- April 2025: Company repurchased an additional $100 million of common stock.
Keywords
Howmet Aerospace, Financial Results, First Quarter 2025, Revenue, EBITDA, EPS, Free Cash Flow, Aerospace, Dividend, Share 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.