Howmet Aerospace (HWM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $1.88B, up 14% year-over-year, led by 27% growth in commercial aerospace and strong defense demand.

• Net income increased to $266M ($0.65 per diluted share), up from $193M ($0.46) in Q2 2023; adjusted EPS rose 52% to $0.67.

• Adjusted EBITDA reached $483M (25.7% margin), up 31% year-over-year; adjusted operating income was $414M (22% margin), up 38%.

• Free cash flow was $342M in Q2, with a quarter-end cash balance of $752M.

• Net debt-to-EBITDA improved to a record low of 1.7x.

Financial highlights

• Revenue: $1.88B (+14% YoY); Net income: $266M; Operating income: $398M (21.2% margin, up from 17.3%).

• Adjusted EBITDA: $483M (+31% YoY); margin: 25.7% (+340 bps YoY).

• Adjusted operating income: $414M (+38% YoY); margin: 22.0% (+370 bps YoY).

• EPS: $0.65 (GAAP), $0.67 (adjusted), both up over 50% year-over-year.

• Free cash flow: $342M in Q2; $437M in H1 2024.

Outlook and guidance

• FY 2024 revenue guidance raised to $7.44B ± $40M; adjusted EBITDA guidance $1.84B–$1.88B; adjusted EPS $2.53–$2.57.

• Free cash flow guidance increased to $870M ± $30M; capex for 2024 expected at $310M–$330M.

• Q3 2024 guidance: revenue $1.845B–$1.865B, adjusted EBITDA $465M ± $5M, adjusted EPS $0.63–$0.65.

• 2025 dividend policy set at 15% ±5% of net income excluding special items; Q3 2024 dividend increased 60% to $0.08/share.

• Commercial transportation demand for Forged Wheels expected to decrease in H2 2024.