Howmet Aerospace Reports Third Quarter 2024 Results
Howmet Aerospace (HWM) reported strong Q3 2024 results with revenue reaching $1.84 billion, up 11% year over year, driven by 17% growth in commercial aerospace, despite a 12% decline in commercial transportation. Net income increased to $332 million ($0.81 per share) from $188 million ($0.45 per share) in Q3 2023. The company achieved an operating income margin of 22.9% and generated $244 million in cash from operations. Notable financial actions included $282 million in debt reduction and $100 million in share repurchases. The company also provided preliminary 2025 revenue guidance projecting approximately 7.5% growth year over year.
Howmet Aerospace (HWM) ha riportato risultati forti per il terzo trimestre del 2024, con un fatturato che ha raggiunto $1,84 miliardi, in aumento dell'11% rispetto all'anno precedente, trainato da una crescita del 17% nel settore aerospaziale commerciale, nonostante un calo del 12% nel trasporto commerciale. L'utile netto è aumentato a $332 milioni ($0,81 per azione) rispetto ai $188 milioni ($0,45 per azione) del terzo trimestre del 2023. L'azienda ha ottenuto un margine di utile operativo del 22,9% e ha generato $244 milioni in contante dalle operazioni. Azioni finanziarie significative hanno incluso una riduzione del debito di $282 milioni e $100 milioni in riacquisti di azioni. L'azienda ha inoltre fornito una guida preliminare per il fatturato del 2025, prevedendo una crescita di circa il 7,5% anno su anno.
Howmet Aerospace (HWM) informó resultados sólidos en el tercer trimestre de 2024, con ingresos que alcanzaron $1,84 mil millones, un aumento del 11% interanual, impulsado por un crecimiento del 17% en la aviación comercial, a pesar de una disminución del 12% en el transporte comercial. El ingreso neto aumentó a $332 millones ($0,81 por acción) desde $188 millones ($0,45 por acción) en el tercer trimestre de 2023. La compañía logró un margen de ingreso operativo del 22,9% y generó $244 millones en efectivo de operaciones. Las acciones financieras notables incluyeron $282 millones en reducción de deuda y $100 millones en recompra de acciones. La compañía también proporcionó una guía preliminar de ingresos para 2025, proyectando un crecimiento de aproximadamente el 7,5% interanual.
하우메트 항공우주 (HWM)는 2024년 3분기 강력한 실적을 보고하며 매출이 18억 4천만 달러에 달해 전년 대비 11% 증가했다고 전했습니다. 이는 상업 항공우주 부문의 17% 성장이 주도했으며, 상업 운송 부문은 12% 감소했습니다. 순이익은 3분기 2023년의 1억 8800만 달러(주당 0.45달러)에서 3억 3200만 달러로 증가했습니다(주당 0.81달러). 회사는 22.9%의 운영 소득 마진을 기록했으며 운영을 통해 2억 4400만 달러의 현금을 창출했습니다. 주목할 만한 재무 조치에는 2억 8200만 달러의 부채 감소와 1억 달러의 자사주 매입이 포함되었습니다. 또한 회사는 2025년 수익 지침을 제공하며 연평균 약 7.5%의 성장을 예상했습니다.
Howmet Aerospace (HWM) a annoncé de solides résultats pour le troisième trimestre de 2024, avec des revenus atteignant 1,84 milliard de dollars, en hausse de 11% par rapport à l'année précédente, soutenus par une croissance de 17% dans le secteur de l'aérospatiale commerciale, malgré une baisse de 12% dans le transport commercial. Le bénéfice net a augmenté à 332 millions de dollars (0,81 $ par action) contre 188 millions de dollars (0,45 $ par action) au troisième trimestre 2023. L'entreprise a atteint une marge de bénéfice opérationnel de 22,9% et a généré 244 millions de dollars de liquidités provenant des opérations. Les actions financières notables comprenaient une réduction de la dette de 282 millions de dollars et des rachats d'actions de 100 millions de dollars. L'entreprise a également fourni des prévisions préliminaires de revenus pour 2025, anticipant une croissance d'environ 7,5% d'une année sur l'autre.
Howmet Aerospace (HWM) meldete starke Ergebnisse für das dritte Quartal 2024 mit einem Umsatz von 1,84 Milliarden Dollar, was einem Anstieg von 11% im Jahresvergleich entspricht, angetrieben von einem Wachstum von 17% im kommerziellen Luftfahrtsektor, trotz eines Rückgangs von 12% im gewerblichen Transportwesen. Der Nettoertrag stieg auf 332 Millionen Dollar (0,81 Dollar pro Aktie) von 188 Millionen Dollar (0,45 Dollar pro Aktie) im dritten Quartal 2023. Das Unternehmen erzielte eine operative Ertragsmarge von 22,9% und generierte 244 Millionen Dollar an operativem Cashflow. Bemerkenswerte finanzielle Maßnahmen umfassten eine Schuldenreduzierung von 282 Millionen Dollar und Rückkäufe von Aktien im Wert von 100 Millionen Dollar. Das Unternehmen gab zudem eine vorläufige Umsatzprognose für 2025 ab und rechnet mit einem Wachstum von etwa 7,5% im Jahresvergleich.
- Revenue increased 11% YoY to $1.84 billion
- Net income rose 77% YoY to $332 million
- Commercial aerospace segment grew 17%
- Adjusted EBITDA increased 27% YoY to $487 million
- Debt reduction actions will reduce annual interest expense by $33 million
- Common stock dividend increased by 60% to $0.08 per share
- Generated $162 million in free cash flow
- Commercial transportation segment declined 12% YoY
- Cash used for financing activities reached $441 million
- Cash used for investing activities was $80 million
Insights
Howmet Aerospace delivered an impressive Q3 2024 with robust financial performance across key metrics. Revenue grew
Notable financial moves include
Revenue Up
2025 Preliminary Revenue Guidance: Up Approximately
Third Quarter 2024 GAAP Financial Results
-
Revenue of
, up$1.84 billion 11% year over year, driven by commercial aerospace, up17% , partially offset by commercial transportation, down12% -
Net income of
versus$332 million in the third quarter 2023; earnings per share of$188 million versus$0.81 in the third quarter 2023$0.45 -
Operating income margin of
22.9% -
Generated
of cash from operations;$244 million of cash used for financing activities; and$441 million of cash used for investing activities$80 million -
Share repurchases of
million;$100 per share dividend on common stock$0.08
Third Quarter 2024 Adjusted Financial Results
-
Adjusted EBITDA excluding special items of
, up$487 million 27% year over year -
Adjusted EBITDA margin excluding special items of
26.5% -
Adjusted operating income margin excluding special items of
22.8% -
Adjusted earnings per share excluding special items of
, up$0.71 54% year over year -
Generated
million of free cash flow$162
2024 Guidance
Q4 2024 Guidance |
FY 2024 Guidance |
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Low |
Baseline |
High |
Low |
Baseline |
High |
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Revenue |
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Adj. EBITDA*1 |
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Adj. EBITDA Margin*1 |
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Adj. Earnings per Share*1 |
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Free Cash Flow1 |
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Third Quarter Key Announcements
-
Redeemed the remaining outstanding principal amount of
of its$205 million 5.125% Notes due October 2024 with cash on hand -
Issued
aggregate principal amount of notes due 2031 (the “2031 Notes”)$500 million -
Redeemed the remaining outstanding principal amount of
of its$577 million 6.875% Notes due May 2025 with proceeds from the 2031 Notes plus cash on hand -
All combined debt actions year to date through the third quarter 2024 will reduce annualized interest expense by approximately
$33 million -
Repurchased
million of common stock at an average price of$100 per share$94.22 -
Increased the common stock dividend by
60% to per share$0.08 - Raised full year 2024 guidance for Adjusted EBITDA*1 and Adjusted earnings per share*1 above the third quarter 2024 outperformance despite industry challenges
____________________________________ |
* Excluding special items |
1 Reconciliations of the forward-looking non-GAAP measures to the most directly comparable GAAP measures, as well as the directly comparable GAAP measures, are not available without unreasonable efforts due to the variability and complexity of the charges and other components excluded from the non-GAAP measures – for further detail, see “2024 Guidance” below. |
Howmet Aerospace (NYSE:HWM) today reported third quarter 2024 results. The Company reported third quarter 2024 revenue of
Howmet Aerospace reported net income of
Howmet Aerospace reported adjusted net income excluding special items of
Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant said, “The Howmet team delivered a healthy set of results in the third quarter 2024. The results exceeded the high end of guidance for Adjusted EBITDA*, Adjusted EBITDA margin* and Adjusted earnings per share*. Revenue growth of
Mr. Plant continued, “Turning to 2025, the demand outlook for commercial aerospace remains robust, driven by healthy air traffic growth. The under-production of aircraft in recent years has resulted in a very large order backlog which, combined with the significant needs for additional engine spare parts, is supportive of future revenue growth. We expect above-trend growth in commercial aerospace to continue in 2025, while we continue to take a cautious approach to the assumed pace of new aircraft builds. We expect growth in 2025 in our defense aerospace and industrial end markets, while we assume that the commercial transportation end market will remain soft until the second half 2025. Our 2025 outlook envisions total revenue growth of approximately
“Howmet Aerospace’s balance sheet remains a source of strength, with leverage at a record low and free cash flow generation of approximately
____________________________________ |
* Excluding special items |
Third Quarter 2024 Segment Performance
Engine Products
(in |
Q3 2023 |
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Third-party sales |
|
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|
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Inter-segment sales |
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Provision for depreciation and amortization |
|
|
|
|
|
Segment Adjusted EBITDA |
|
|
|
|
|
Segment Adjusted EBITDA Margin |
27.4 % |
27.3 % |
28.1 % |
31.3 % |
|
Restructuring and other credits |
$ — |
|
$ — |
|
|
Capital expenditures |
|
|
|
|
|
Engine Products reported revenue of
Fastening Systems
(in |
Q3 2023 |
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Third-party sales |
|
|
|
|
|
Provision for depreciation and amortization |
|
|
|
|
|
Segment Adjusted EBITDA |
|
|
|
|
|
Segment Adjusted EBITDA Margin |
21.8 % |
22.2 % |
23.7 % |
|
|
Restructuring and other charges |
|
$ — |
$ — |
|
|
Capital expenditures |
|
|
|
|
|
Fastening Systems reported revenue of
Engineered Structures
(in |
Q3 2023 |
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Third-party sales |
|
|
|
|
|
Inter-segment sales |
$ — |
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Provision for depreciation and amortization |
|
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|
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Segment Adjusted EBITDA |
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|
|
|
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Segment Adjusted EBITDA Margin |
13.2 % |
13.5 % |
14.1 % |
|
|
Restructuring and other charges |
|
|
$ — |
|
|
Capital expenditures |
|
|
|
|
|
Engineered Structures reported revenue of
Forged Wheels
(in |
Q3 2023 |
Q4 2023 |
Q1 2024 |
Q2 2024 |
Q3 2024 |
Third-party sales |
|
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|
|
Provision for depreciation and amortization |
|
|
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|
|
Segment Adjusted EBITDA |
|
|
|
|
|
Segment Adjusted EBITDA Margin |
27.0 % |
26.2 % |
|
27.0 % |
|
Restructuring and other charges |
$ — |
$ — |
$ — |
$ — |
|
Capital expenditures |
|
|
|
|
|
Forged Wheels reported revenue of
Redeemed Remaining
On July 1, 2024, Howmet Aerospace completed the redemption of the remaining outstanding principal amount of
Issued
On August 22, 2024 the Company issued
On August 23, 2024 the Company redeemed the remaining outstanding principal amount of
All combined debt actions year to date through the third quarter 2024 will reduce annualized interest expense by approximately
All of the Company’s outstanding debt is unsecured and at fixed interest rates. The Company’s next debt maturity is in November 2026.
Repurchased
In the third quarter 2024, Howmet Aerospace repurchased
Quarterly Common Stock Dividend of
On September 25, 2024, the Board of Directors declared a dividend of
2024 Guidance
Q4 2024 Guidance |
FY 2024 Guidance |
||||||
Low |
Baseline |
High |
|
Low |
Baseline |
High |
|
Revenue |
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|
|
Adj. EBITDA*1 |
|
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Adj. EBITDA Margin*1 |
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Adj. Earnings per Share*1 |
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Free Cash Flow1 |
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* Excluding Special Items
1 Reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as the directly comparable GAAP measures, are not available without unreasonable efforts due to the variability and complexity of the charges and other components excluded from the non-GAAP measures, such as the effects of foreign currency movements, gains or losses on sales of assets, taxes, and any future restructuring or impairment charges. In addition, there is inherent variability already included in the GAAP measures, including, but not limited to, price/mix and volume. Howmet Aerospace believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors. |
Howmet Aerospace will hold its quarterly conference call at 10:00 AM Eastern Time on Wednesday, November 6, 2024. The call will be webcast via www.howmet.com. The press release and presentation materials will be available at approximately 7:00 AM ET on November 6, via the “Investors” section of the Howmet Aerospace website.
About Howmet Aerospace
Howmet Aerospace Inc., headquartered in
Dissemination of Company Information
Howmet Aerospace intends to make future announcements regarding Company developments and financial performance through its website at www.howmet.com.
Forward-Looking Statements
This release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "anticipates", "believes", "could", “envisions”, "estimates", "expects", "forecasts", "goal", "guidance", "intends", "may", "outlook", "plans", "projects", "seeks", "sees", "should", "targets", "will", "would", or other words of similar meaning. All statements that reflect Howmet Aerospace’s expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements, forecasts and outlook relating to the condition of end markets; future financial results or operating performance; future strategic actions; Howmet Aerospace's strategies, outlook, and business and financial prospects; and any future dividends, debt issuances, debt reduction and repurchases of its common stock. These statements reflect beliefs and assumptions that are based on Howmet Aerospace’s perception of historical trends, current conditions and expected future developments, as well as other factors Howmet Aerospace believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and changes in circumstances that are difficult to predict, which could cause actual results to differ materially from those indicated by these statements. Such risks and uncertainties include, but are not limited to: (a) deterioration in global economic and financial market conditions generally; (b) unfavorable changes in the markets served by Howmet Aerospace; (c) the impact of potential cyber attacks and information technology or data security breaches; (d) the loss of significant customers or adverse changes in customers’ business or financial conditions; (e) manufacturing difficulties or other issues that impact product performance, quality or safety; (f) inability of suppliers to meet obligations due to supply chain disruptions or otherwise; (g) failure to attract and retain a qualified workforce and key personnel, labor disputes or other employee relations issues; (h) the inability to achieve revenue growth, cash generation, restructuring plans, cost reductions, improvement in profitability, or strengthening of competitiveness and operations anticipated or targeted; (i) inability to meet increased demand, production targets or commitments; (j) competition from new product offerings, disruptive technologies or other developments; (k) geopolitical, economic, and regulatory risks relating to Howmet Aerospace’s global operations, including geopolitical and diplomatic tensions, instabilities, conflicts and wars, as well as compliance with
Non-GAAP Financial Measures
Some of the information included in this release is derived from Howmet Aerospace’s consolidated financial information but is not presented in Howmet Aerospace’s financial statements prepared in accordance with accounting principles generally accepted in
Other Information
In this press release, the acronym “FY” means “full year” and “Q” means “quarter”; and references to Howmet Aerospace performance that is “record” means its best result since April 1, 2020 when Howmet Aerospace Inc. (previously named Arconic Inc.) separated from Arconic Corporation.
Howmet Aerospace Inc. and subsidiaries Statement of Consolidated Operations (unaudited)
(in |
|||||||||
|
Quarter ended |
||||||||
|
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
||||
Sales |
$ |
1,835 |
|
|
$ |
1,880 |
|
$ |
1,658 |
|
|
|
|
|
|
||||
Cost of goods sold (exclusive of expenses below) |
|
1,253 |
|
|
|
1,287 |
|
|
1,183 |
Selling, general administrative, and other expenses |
|
85 |
|
|
|
97 |
|
|
87 |
Research and development expenses |
|
9 |
|
|
|
7 |
|
|
9 |
Provision for depreciation and amortization |
|
68 |
|
|
|
69 |
|
|
68 |
Restructuring and other (credits) charges |
|
(1 |
) |
|
|
22 |
|
|
4 |
Operating income |
|
421 |
|
|
|
398 |
|
|
307 |
|
|
|
|
|
|
||||
Loss on debt redemption |
|
6 |
|
|
|
— |
|
|
— |
Interest expense, net |
|
44 |
|
|
|
49 |
|
|
54 |
Other expense, net |
|
17 |
|
|
|
15 |
|
|
11 |
|
|
|
|
|
|
||||
Income before income taxes |
|
354 |
|
|
|
334 |
|
|
242 |
Provision for income taxes |
|
22 |
|
|
|
68 |
|
|
54 |
Net income |
$ |
332 |
|
|
$ |
266 |
|
$ |
188 |
|
|
|
|
|
|
||||
Amounts Attributable to Howmet Aerospace Common Shareholders: |
|
|
|
|
|
||||
Earnings per share - basic(1): |
|
|
|
|
|
||||
Net income per share |
$ |
0.81 |
|
|
$ |
0.65 |
|
$ |
0.45 |
Average number of shares(2)(3) |
|
408 |
|
|
|
408 |
|
|
412 |
|
|
|
|
|
|
||||
Earnings per share - diluted(1): |
|
|
|
|
|
||||
Net income per share |
$ |
0.81 |
|
|
$ |
0.65 |
|
$ |
0.45 |
Average number of shares(2)(3) |
|
410 |
|
|
|
411 |
|
|
415 |
|
|
|
|
|
|
||||
Common stock outstanding at the end of the period |
|
407 |
|
|
|
408 |
|
|
412 |
(1) |
In order to calculate both basic and diluted earnings per share, preferred stock dividends declared of less than |
|
(2) | For the quarters presented, the difference between the diluted average number of shares and the basic average number of shares relates to share equivalents associated with outstanding restricted stock unit awards and employee stock options. |
|
(3) | As average shares outstanding are used in the calculation of both basic and diluted earnings per share, the full impact of share repurchases is not fully realized in earnings per share ("EPS") in the period of repurchase since share repurchases may occur at varying points during a period. |
Howmet Aerospace Inc. and subsidiaries Consolidated Balance Sheet (unaudited)
(in |
|||||||
|
September 30, 2024 |
|
December 31, 2023 |
||||
Assets |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
475 |
|
|
$ |
610 |
|
Receivables from customers, less allowances of $— in both 2024 and 2023 |
|
757 |
|
|
|
675 |
|
Other receivables |
|
18 |
|
|
|
17 |
|
Inventories |
|
1,902 |
|
|
|
1,765 |
|
Prepaid expenses and other current assets |
|
239 |
|
|
|
249 |
|
Total current assets |
|
3,391 |
|
|
|
3,316 |
|
Properties, plants, and equipment, net |
|
2,358 |
|
|
|
2,328 |
|
Goodwill |
|
4,047 |
|
|
|
4,035 |
|
Deferred income taxes |
|
39 |
|
|
|
46 |
|
Intangibles, net |
|
484 |
|
|
|
505 |
|
Other noncurrent assets |
|
239 |
|
|
|
198 |
|
Total assets |
$ |
10,558 |
|
|
$ |
10,428 |
|
|
|
|
|
||||
Liabilities |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable, trade |
$ |
917 |
|
|
$ |
982 |
|
Accrued compensation and retirement costs |
|
288 |
|
|
|
263 |
|
Taxes, including income taxes |
|
59 |
|
|
|
68 |
|
Accrued interest payable |
|
25 |
|
|
|
65 |
|
Other current liabilities |
|
227 |
|
|
|
200 |
|
Short-term debt |
|
1 |
|
|
|
206 |
|
Total current liabilities |
|
1,517 |
|
|
|
1,784 |
|
Long-term debt, less amount due within one year |
|
3,393 |
|
|
|
3,500 |
|
Accrued pension benefits |
|
629 |
|
|
|
664 |
|
Accrued other postretirement benefits |
|
84 |
|
|
|
92 |
|
Other noncurrent liabilities and deferred credits |
|
432 |
|
|
|
351 |
|
Total liabilities |
|
6,055 |
|
|
|
6,391 |
|
|
|
|
|
||||
Equity |
|
|
|
||||
Howmet Aerospace shareholders’ equity: |
|
|
|
||||
Preferred stock |
|
55 |
|
|
|
55 |
|
Common stock |
|
407 |
|
|
|
410 |
|
Additional capital |
|
3,386 |
|
|
|
3,682 |
|
Retained earnings |
|
2,453 |
|
|
|
1,720 |
|
Accumulated other comprehensive loss |
|
(1,798 |
) |
|
|
(1,830 |
) |
Total equity |
|
4,503 |
|
|
|
4,037 |
|
Total liabilities and equity |
$ |
10,558 |
|
|
$ |
10,428 |
|
Howmet Aerospace and subsidiaries Statement of Consolidated Cash Flows (unaudited)
(in |
|||||||
|
Nine months ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Operating activities |
|
|
|
||||
Net income |
$ |
841 |
|
|
$ |
529 |
|
Adjustments to reconcile net income to cash provided from operations: |
|
|
|
||||
Depreciation and amortization |
|
204 |
|
|
|
204 |
|
Deferred income taxes |
|
39 |
|
|
|
92 |
|
Restructuring and other charges |
|
21 |
|
|
|
8 |
|
Net realized and unrealized losses |
|
18 |
|
|
|
17 |
|
Net periodic pension cost |
|
31 |
|
|
|
28 |
|
Stock-based compensation |
|
54 |
|
|
|
39 |
|
Loss on debt redemption |
|
6 |
|
|
|
1 |
|
Other |
|
4 |
|
|
|
2 |
|
Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments: |
|
|
|
||||
Increase in receivables |
|
(97 |
) |
|
|
(211 |
) |
Increase in inventories |
|
(139 |
) |
|
|
(148 |
) |
Decrease (increase) in prepaid expenses and other current assets |
|
9 |
|
|
|
(12 |
) |
Decrease in accounts payable, trade |
|
(67 |
) |
|
|
(57 |
) |
Decrease in accrued expenses |
|
(42 |
) |
|
|
(18 |
) |
(Decrease) increase in taxes, including income taxes |
|
(5 |
) |
|
|
17 |
|
Pension contributions |
|
(33 |
) |
|
|
(19 |
) |
Increase in noncurrent assets |
|
(6 |
) |
|
|
(2 |
) |
Decrease in noncurrent liabilities |
|
(20 |
) |
|
|
(27 |
) |
Cash provided from operations |
|
818 |
|
|
|
443 |
|
Financing Activities |
|
|
|
||||
Additions to debt |
|
500 |
|
|
|
— |
|
Repurchases and payments on debt |
|
(805 |
) |
|
|
(376 |
) |
Debt issuance costs |
|
(5 |
) |
|
|
— |
|
Premiums paid on early redemption of debt |
|
(5 |
) |
|
|
(1 |
) |
Repurchases of common stock |
|
(310 |
) |
|
|
(150 |
) |
Proceeds from exercise of employee stock options |
|
7 |
|
|
|
10 |
|
Dividends paid to shareholders |
|
(76 |
) |
|
|
(52 |
) |
Taxes paid for net share settlement of equity awards |
|
(48 |
) |
|
|
(77 |
) |
Cash used for financing activities |
|
(742 |
) |
|
|
(646 |
) |
Investing Activities |
|
|
|
||||
Capital expenditures |
|
(219 |
) |
|
|
(164 |
) |
Proceeds from the sale of assets and businesses |
|
9 |
|
|
|
1 |
|
Other |
|
1 |
|
|
|
— |
|
Cash used for investing activities |
|
(209 |
) |
|
|
(163 |
) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(2 |
) |
|
|
(1 |
) |
Net change in cash, cash equivalents and restricted cash |
|
(135 |
) |
|
|
(367 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
610 |
|
|
|
792 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
475 |
|
|
$ |
425 |
|
Howmet Aerospace Inc. and subsidiaries Segment Information (unaudited)
(in |
||||||||||||||||||||||||
|
|
1Q23 |
|
|
2Q23 |
|
|
3Q23 |
|
|
4Q23 |
|
|
2023 |
|
|
1Q24 |
|
|
2Q24 |
|
|
3Q24 |
|
Engine Products |
|
|
|
|
|
|
|
|
||||||||||||||||
Third-party sales |
$ |
795 |
|
$ |
821 |
|
$ |
798 |
|
$ |
852 |
|
$ |
3,266 |
|
$ |
885 |
|
$ |
933 |
|
$ |
945 |
|
Inter-segment sales |
$ |
2 |
|
$ |
5 |
|
$ |
5 |
|
$ |
1 |
|
$ |
13 |
|
$ |
2 |
|
$ |
1 |
|
$ |
3 |
|
Provision for depreciation and amortization |
$ |
32 |
|
$ |
32 |
|
$ |
33 |
|
$ |
33 |
|
$ |
130 |
|
$ |
33 |
|
$ |
33 |
|
$ |
34 |
|
Segment Adjusted EBITDA |
$ |
212 |
|
$ |
223 |
|
$ |
219 |
|
$ |
233 |
|
$ |
887 |
|
$ |
249 |
|
$ |
292 |
|
$ |
307 |
|
Segment Adjusted EBITDA Margin |
|
26.7 |
% |
|
27.2 |
% |
|
27.4 |
% |
|
27.3 |
% |
|
27.2 |
% |
|
28.1 |
% |
|
31.3 |
% |
|
32.5 |
% |
Restructuring and other (credits) charges |
$ |
— |
|
$ |
(1 |
) |
$ |
— |
|
$ |
(1 |
) |
$ |
(2 |
) |
$ |
— |
|
$ |
(1 |
) |
$ |
1 |
|
Capital expenditures |
$ |
33 |
|
$ |
21 |
|
$ |
30 |
|
$ |
28 |
|
$ |
112 |
|
$ |
55 |
|
$ |
33 |
|
$ |
55 |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Fastening Systems |
|
|
|
|
|
|
|
|
||||||||||||||||
Third-party sales |
$ |
312 |
|
$ |
329 |
|
$ |
348 |
|
$ |
360 |
|
$ |
1,349 |
|
$ |
389 |
|
$ |
394 |
|
$ |
392 |
|
Provision for depreciation and amortization |
$ |
11 |
|
$ |
12 |
|
$ |
12 |
|
$ |
11 |
|
$ |
46 |
|
$ |
11 |
|
$ |
13 |
|
$ |
12 |
|
Segment Adjusted EBITDA |
$ |
58 |
|
$ |
64 |
|
$ |
76 |
|
$ |
80 |
|
$ |
278 |
|
$ |
92 |
|
$ |
101 |
|
$ |
102 |
|
Segment Adjusted EBITDA Margin |
|
18.6 |
% |
|
19.5 |
% |
|
21.8 |
% |
|
22.2 |
% |
|
20.6 |
% |
|
23.7 |
% |
|
25.6 |
% |
|
26.0 |
% |
Restructuring and other charges |
$ |
— |
|
$ |
— |
|
$ |
1 |
|
$ |
— |
|
$ |
1 |
|
$ |
— |
|
$ |
2 |
|
$ |
1 |
|
Capital expenditures |
$ |
9 |
|
$ |
5 |
|
$ |
9 |
|
$ |
8 |
|
$ |
31 |
|
$ |
7 |
|
$ |
5 |
|
$ |
5 |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Engineered Structures |
|
|
|
|
|
|
|
|
||||||||||||||||
Third-party sales |
$ |
207 |
|
$ |
200 |
|
$ |
227 |
|
$ |
244 |
|
$ |
878 |
|
$ |
262 |
|
$ |
275 |
|
$ |
253 |
|
Inter-segment sales |
$ |
— |
|
$ |
1 |
|
$ |
— |
|
$ |
2 |
|
$ |
3 |
|
$ |
1 |
|
$ |
3 |
|
$ |
3 |
|
Provision for depreciation and amortization |
$ |
12 |
|
$ |
12 |
|
$ |
12 |
|
$ |
11 |
|
$ |
47 |
|
$ |
11 |
|
$ |
11 |
|
$ |
10 |
|
Segment Adjusted EBITDA |
$ |
30 |
|
$ |
20 |
|
$ |
30 |
|
$ |
33 |
|
$ |
113 |
|
$ |
37 |
|
$ |
40 |
|
$ |
38 |
|
Segment Adjusted EBITDA Margin |
|
14.5 |
% |
|
10.0 |
% |
|
13.2 |
% |
|
13.5 |
% |
|
12.9 |
% |
|
14.1 |
% |
|
14.5 |
% |
|
15.0 |
% |
Restructuring and other charges |
$ |
1 |
|
$ |
5 |
|
$ |
1 |
|
$ |
14 |
|
$ |
21 |
|
$ |
— |
|
$ |
14 |
|
$ |
1 |
|
Capital expenditures |
$ |
10 |
|
$ |
5 |
|
$ |
6 |
|
$ |
5 |
|
$ |
26 |
|
$ |
6 |
|
$ |
5 |
|
$ |
5 |
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Forged Wheels |
|
|
|
|
|
|
|
|
||||||||||||||||
Third-party sales |
$ |
289 |
|
$ |
298 |
|
$ |
285 |
|
$ |
275 |
|
$ |
1,147 |
|
$ |
288 |
|
$ |
278 |
|
$ |
245 |
|
Provision for depreciation and amortization |
$ |
9 |
|
$ |
10 |
|
$ |
10 |
|
$ |
10 |
|
$ |
39 |
|
$ |
10 |
|
$ |
10 |
|
$ |
10 |
|
Segment Adjusted EBITDA |
$ |
79 |
|
$ |
81 |
|
$ |
77 |
|
$ |
72 |
|
$ |
309 |
|
$ |
82 |
|
$ |
75 |
|
$ |
64 |
|
Segment Adjusted EBITDA Margin |
|
27.3 |
% |
|
27.2 |
% |
|
27.0 |
% |
|
26.2 |
% |
|
26.9 |
% |
|
28.5 |
% |
|
27.0 |
% |
|
26.1 |
% |
Restructuring and other charges |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
1 |
|
Capital expenditures |
$ |
9 |
|
$ |
7 |
|
$ |
9 |
|
$ |
11 |
|
$ |
36 |
|
$ |
12 |
|
$ |
9 |
|
$ |
14 |
|
Differences between the total segment and consolidated totals are in Corporate. |
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited)
(in |
||||||||||||||||||||||||
Reconciliation of Total Segment Adjusted EBITDA to Consolidated Income Before Income Taxes |
||||||||||||||||||||||||
|
|
1Q23 |
|
|
2Q23 |
|
|
3Q23 |
|
|
4Q23 |
|
|
2023 |
|
|
1Q24 |
|
|
2Q24 |
|
|
3Q24 |
|
Income before income taxes |
$ |
220 |
$ |
243 |
|
$ |
242 |
$ |
270 |
$ |
975 |
$ |
303 |
$ |
334 |
$ |
354 |
|
||||||
Loss on debt redemption |
|
1 |
|
— |
|
|
— |
|
1 |
|
2 |
|
— |
|
— |
|
6 |
|
||||||
Interest expense, net |
|
57 |
|
55 |
|
|
54 |
|
52 |
|
218 |
|
49 |
|
49 |
|
44 |
|
||||||
Other expense, net |
|
7 |
|
(13 |
) |
|
11 |
|
3 |
|
8 |
|
17 |
|
15 |
|
17 |
|
||||||
Operating income |
$ |
285 |
$ |
285 |
|
$ |
307 |
$ |
326 |
$ |
1,203 |
$ |
369 |
$ |
398 |
$ |
421 |
|
||||||
Segment provision for depreciation and amortization |
|
64 |
|
66 |
|
|
67 |
|
65 |
|
262 |
|
65 |
|
67 |
|
66 |
|
||||||
Unallocated amounts: |
|
|
|
|
|
|
|
|
||||||||||||||||
Restructuring and other charges (credits) |
|
1 |
|
3 |
|
|
4 |
|
15 |
|
23 |
|
— |
|
22 |
|
(1 |
) |
||||||
Corporate expense(1) |
|
29 |
|
34 |
|
|
24 |
|
12 |
|
99 |
|
26 |
|
21 |
|
25 |
|
||||||
Total Segment Adjusted EBITDA |
$ |
379 |
$ |
388 |
|
$ |
402 |
$ |
418 |
$ |
1,587 |
$ |
460 |
$ |
508 |
$ |
511 |
|
||||||
Total Segment Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Total Segment Adjusted EBITDA provides additional information with respect to the Company's operating performance and the Company’s ability to meet its financial obligations. The Total Segment Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. Howmet’s definition of Total Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. Special items, including Restructuring and other charges (credits), are excluded from net margin and Segment Adjusted EBITDA. Differences between the total segment and consolidated totals are in Corporate. |
(1) Pre-tax special items included in Corporate expense |
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
1Q23 |
|
|
2Q23 |
|
|
3Q23 |
|
|
4Q23 |
|
|
2023 |
|
|
1Q24 |
|
|
2Q24 |
|
|
3Q24 |
|
Plant fire costs (reimbursements), net |
$ |
4 |
$ |
(4 |
) |
$ |
1 |
$ |
(13 |
) |
$ |
(12 |
) |
$ |
— |
$ |
(6 |
) |
$ |
— |
|
|||
Collective bargaining agreement negotiation |
|
— |
|
7 |
|
|
1 |
|
— |
|
|
8 |
|
|
— |
|
— |
|
|
— |
|
|||
Costs (benefits) associated with closures, supply chain disruptions, and other items |
|
1 |
|
9 |
|
|
1 |
|
2 |
|
|
13 |
|
|
1 |
|
— |
|
|
(1 |
) |
|||
Total Pre-tax special items included in Corporate expense |
$ |
5 |
$ |
12 |
|
$ |
3 |
$ |
(11 |
) |
$ |
9 |
|
$ |
1 |
$ |
(6 |
) |
$ |
(1 |
) |
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
||||||||||||||||
Reconciliation of Free cash flow |
Quarter ended |
|
Nine months ended |
|||||||||||||
|
1Q24 |
|
|
|
2Q24 |
|
|
|
3Q24 |
|
|
|
|
3Q24 |
|
|
Cash provided from operations |
$ |
177 |
|
|
$ |
397 |
|
|
$ |
244 |
|
|
|
$ |
818 |
|
Capital expenditures |
|
(82 |
) |
|
|
(55 |
) |
|
|
(82 |
) |
|
|
|
(219 |
) |
Free cash flow |
$ |
95 |
|
|
$ |
342 |
|
|
$ |
162 |
|
|
|
$ |
599 |
|
The Accounts Receivable Securitization program remains unchanged at
Free cash flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures (due to the fact that these expenditures are considered necessary to maintain and expand the Company's asset base and are expected to generate future cash flows from operations). It is important to note that Free cash flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure. |
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
|||||||||||
Reconciliation of Net income excluding Special items |
Quarter ended |
||||||||||
|
3Q23 |
|
|
|
2Q24 |
|
|
|
3Q24 |
|
|
Net income |
$ |
188 |
|
|
$ |
266 |
|
|
$ |
332 |
|
|
|
|
|
|
|
||||||
Diluted earnings per share ("EPS") |
$ |
0.45 |
|
|
$ |
0.65 |
|
|
$ |
0.81 |
|
|
|
|
|
|
|
||||||
Special items: |
|
|
|
|
|
||||||
Restructuring and other charges (credits)(1) |
|
4 |
|
|
|
22 |
|
|
|
(1 |
) |
Loss on debt redemption and related costs |
|
— |
|
|
|
— |
|
|
|
6 |
|
Plant fire costs (reimbursements), net |
|
1 |
|
|
|
(6 |
) |
|
|
— |
|
Collective bargaining agreement negotiations |
|
1 |
|
|
|
— |
|
|
|
— |
|
Costs (benefits) associated with closures, supply chain disruptions, and other items |
|
1 |
|
|
|
— |
|
|
|
(1 |
) |
Subtotal: Pre-tax special items |
|
7 |
|
|
|
16 |
|
|
|
4 |
|
Tax impact of Pre-tax special items(2) |
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
Subtotal |
|
6 |
|
|
|
16 |
|
|
|
3 |
|
|
|
|
|
|
|
||||||
Discrete and other tax special items(3) |
|
(2 |
) |
|
|
(6 |
) |
|
|
(45 |
) |
Total: After-tax special items |
|
4 |
|
|
|
10 |
|
|
|
(42 |
) |
|
|
|
|
|
|
||||||
Net income excluding Special items |
$ |
192 |
|
|
$ |
276 |
|
|
$ |
290 |
|
|
|
|
|
|
|
||||||
Diluted EPS excluding Special items |
$ |
0.46 |
|
|
$ |
0.67 |
|
|
$ |
0.71 |
|
|
|
|
|
|
|
||||||
Average number of shares - diluted EPS excluding Special items |
|
415 |
|
|
|
411 |
|
|
|
410 |
|
Net income excluding Special items and Diluted EPS excluding Special items are non-GAAP financial measures. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Restructuring and other charges (credits), Discrete tax items, and Other special items (collectively, “Special items”). There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Net income and Diluted EPS determined under GAAP as well as Net income excluding Special items and Diluted EPS excluding Special items. |
(1) |
Q2 2024 includes non-cash Special items of a loss on sale of a small manufacturing facility in Engineered Structures |
|
(2) | The Tax impact of Pre-tax special items is based on the applicable statutory rates whereby the difference between such rates and the Company’s consolidated estimated annual effective tax rate is itself a Special item. |
|
(3) | Discrete tax items for each period included the following: |
|
|
||
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
|||||||||||||||||||||
Reconciliation of Operational tax rate |
3Q24 |
|
Nine months ended September 30, 2024 |
||||||||||||||||||
Effective tax
|
|
Special
|
|
Operational
|
|
Effective tax
|
|
Special
|
|
Operational
|
|||||||||||
Income before income taxes |
$ |
354 |
|
|
$ |
4 |
|
$ |
358 |
|
|
$ |
991 |
|
|
$ |
21 |
|
$ |
1,012 |
|
Provision for income taxes |
$ |
22 |
|
|
$ |
46 |
|
$ |
68 |
|
|
$ |
150 |
|
|
$ |
58 |
|
$ |
208 |
|
Tax rate |
|
6.2 |
% |
|
|
|
|
19.0 |
% |
|
|
15.1 |
% |
|
|
|
|
20.6 |
% |
||
Operational tax rate is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both the Effective tax rate determined under GAAP as well as the Operational tax rate. |
(1) |
Pre-tax special items for the quarter ended September 30, 2024 included Loss on debt redemption and related costs |
|
(2) | Tax Special items includes discrete tax items, the tax impact on Special items based on the applicable statutory rates, the difference between such rates and the Company’s consolidated estimated annual effective tax rate and other tax related items. Discrete tax items for each period included the following: |
|
|
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
|||||||||||
Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin excluding Special items |
|
||||||||||
|
3Q23 |
|
|
|
2Q24 |
|
|
|
3Q24 |
|
|
Sales |
$ |
1,658 |
|
|
$ |
1,880 |
|
|
$ |
1,835 |
|
Operating income |
$ |
307 |
|
|
$ |
398 |
|
|
$ |
421 |
|
Operating income margin |
|
18.5 |
% |
|
|
21.2 |
% |
|
|
22.9 |
% |
|
|
|
|
|
|
||||||
Net income |
$ |
188 |
|
|
$ |
266 |
|
|
$ |
332 |
|
Add: |
|
|
|
|
|
||||||
Provision for income taxes |
$ |
54 |
|
|
$ |
68 |
|
|
$ |
22 |
|
Other expense, net |
|
11 |
|
|
|
15 |
|
|
|
17 |
|
Loss on debt redemption |
|
— |
|
|
|
— |
|
|
|
6 |
|
Interest expense, net |
|
54 |
|
|
|
49 |
|
|
|
44 |
|
Restructuring and other charges (credits) |
|
4 |
|
|
|
22 |
|
|
|
(1 |
) |
Provision for depreciation and amortization |
|
68 |
|
|
|
69 |
|
|
|
68 |
|
Adjusted EBITDA |
$ |
379 |
|
|
$ |
489 |
|
|
$ |
488 |
|
|
|
|
|
|
|
||||||
Add: |
|
|
|
|
|
||||||
Plant fire costs (reimbursements), net |
$ |
1 |
|
|
$ |
(6 |
) |
|
$ |
— |
|
Collective bargaining agreement negotiations |
|
1 |
|
|
|
— |
|
|
|
— |
|
Costs (benefits) associated with closures, supply chain disruptions, and other items |
|
1 |
|
|
|
— |
|
|
|
(1 |
) |
Adjusted EBITDA excluding Special items |
$ |
382 |
|
|
$ |
483 |
|
|
$ |
487 |
|
|
|
|
|
|
|
||||||
Adjusted EBITDA margin excluding Special items |
|
23.0 |
% |
|
|
25.7 |
% |
|
|
26.5 |
% |
Incremental margin |
Quarter ended |
|
|
||
September 30, 2023 |
|
September 30, 2024 |
|
Q3 2024 YoY |
|
Third-party sales (b) |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA excluding Special items (a) |
|
|
|
|
|
|
|
|
|
|
|
Incremental margin (a)/(b) |
|
|
|
|
|
Adjusted EBITDA, Adjusted EBITDA excluding Special items, Adjusted EBITDA margin excluding Special items, Third-party sales, and Incremental margin are non-GAAP financial measures. Management believes that these measures are meaningful to investors because they provide additional information with respect to the Company's operating performance and the Company’s ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. The Company's definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold, Selling, general administrative, and other expenses, Research and development expenses, and Provision for depreciation and amortization. Special items, including Restructuring and other are charges (credits), are excluded from Adjusted EBITDA. |
Howmet Aerospace Inc. and subsidiaries Calculation of Financial Measures (unaudited), continued
(in |
|||||||||||
Reconciliation of Adjusted Operating Income Excluding Special Items and Adjusted Operating Income Margin Excluding Special Items |
Quarter ended |
||||||||||
|
3Q23 |
|
|
|
2Q24 |
|
|
|
3Q24 |
|
|
Sales |
$ |
1,658 |
|
|
$ |
1,880 |
|
|
$ |
1,835 |
|
Operating income |
$ |
307 |
|
|
$ |
398 |
|
|
$ |
421 |
|
Operating income margin |
|
18.5 |
% |
|
|
21.2 |
% |
|
|
22.9 |
% |
|
|
|
|
|
|
||||||
Add: |
|
|
|
|
|
||||||
Restructuring and other charges (credits) |
$ |
4 |
|
|
$ |
22 |
|
|
$ |
(1 |
) |
Plant fire costs (reimbursements), net |
|
1 |
|
|
|
(6 |
) |
|
|
— |
|
Collective bargaining agreement negotiations |
|
1 |
|
|
|
— |
|
|
|
— |
|
Costs (benefits) associated with closures, supply chain disruptions, and other items |
|
1 |
|
|
|
— |
|
|
|
(1 |
) |
Adjusted operating income excluding Special items |
$ |
314 |
|
|
$ |
414 |
|
|
$ |
419 |
|
|
|
|
|
|
|
||||||
Adjusted operating income margin excluding Special items |
|
18.9 |
% |
|
|
22.0 |
% |
|
|
22.8 |
% |
Adjusted operating income excluding Special items and Adjusted operating income margin excluding Special items are non-GAAP financial measures. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Operating income determined under GAAP as well as Operating income excluding Special items. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106463205/en/
Investor Contact
Paul T. Luther
(412) 553-1950
Paul.Luther@howmet.com
Media Contact
Rob Morrison
(412) 553-2666
Rob.Morrison@howmet.com
Source: Howmet Aerospace Inc.
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