Howmet Aerospace (HWM) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 11% year-over-year to $1.84B, led by 17% growth in commercial aerospace and a 12% decline in commercial transportation.

• Net income rose to $332M ($0.81 per diluted share) from $188M ($0.45 per diluted share) in Q3 2023; adjusted EPS grew 54% to $0.71.

• Adjusted EBITDA increased 27% year-over-year to $487M, with margin expanding to 26.5%, up ~350 bps.

• Record Q3 free cash flow of $162M; year-to-date free cash flow at $600M; cash from operations was $818M for the nine months ended September 30, 2024.

• $282M debt reduction and $100M in share repurchases in Q3; dividend increased 60% to $0.08 per share.

Financial highlights

• Operating income was $421M, up 37% year-over-year; margin improved to 22.9%.

• Net income (GAAP) for Q3 2024 was $332M, up from $188M in Q3 2023.

• Adjusted EPS excluding special items was $0.71, up 54% year-over-year.

• Free cash flow for Q3 was $162M; cash balance at quarter-end was $475M.

• Net debt-to-LTM adjusted EBITDA at 1.6x, a record low.

Outlook and guidance

• FY 2024 revenue guidance: $7.39B–$7.43B; adjusted EBITDA: $1.885B–$1.905B; adjusted EPS: $2.65–$2.67; free cash flow: $890M–$940M.

• Q4 2024 guidance: revenue $1.85B–$1.89B, EBITDA $488M ±$10M, EPS $0.71 ±$0.01.

• FY 2025 preliminary revenue growth expected at 7.5% year-over-year, driven by commercial aerospace.

• Dividend expected to increase 25% to $0.10 per share in Q1 2025, subject to Board approval.

• Capex for FY 2024 projected at $310M–$330M; net debt-to-EBITDA expected to improve toward ~1.5x by year-end.