01—Abstract
Summary
Summary of the 10-K filed February 14, 2022. Cited figures are marked; the original filing is the authoritative source.
Howmet Aerospace Inc. (HWM) reported its 2021 full-year results, indicating a 5% decrease in sales to $4.97 billiona compared to 2020.
This decline was primarily driven by lower sales volumes in the commercial aerospace sector, attributed to the ongoing impact of COVID-19 and production adjustments by major customers like Boeing. Despite the sales dip, segment operating profit saw a 6% increase to $939 millionb, benefiting from growth in commercial transportation and industrial gas turbine markets, alongside favorable product pricing that outpaced material and inflationary costs. Financially, the company demonstrated a strong focus on liquidity and balance sheet improvement.
Cash provided from operations was $449 millionc, and total debt was reduced by $843 million to $4.23 billion. Howmet also continued its share repurchase program, buying back approximately 13 million shares for $430 million.
The company ended the year with a solid financial position and projects sales growth in 2022, anticipating robust demand across its key markets. Management remains focused on operational performance, cost reductions, and capital efficiency to drive future earnings growth.
02—Key points
Key Highlights
- Sales declined by 5% year-over-year to $4.97 billion in 2021, primarily due to weakness in the commercial aerospace market.
- Segment operating profit increased by 6% to $939 million, driven by commercial transportation, industrial gas turbines, and favorable pricing.
- The company repurchased approximately 13 million shares of common stock for $430 million.
- Total debt was reduced by $843 million to $4.23 billion.
- Cash provided from operations was $449 million, demonstrating operational cash generation.
- Howmet Aerospace expects sales to increase in 2022, projecting growth across most key markets.
- The company has a significant presence in the aerospace market (60% of revenue) and commercial transportation (23% of revenue).
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 14, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $4.97B$5.26B | −5.5% |
| R&D Expenses | $17.00M$17.00M | 0.0% |
| SG&A Expenses | $251.00M$277.00M | −9.4% |
| Operating Income | $748.00M$626.00M | +19.5% |
| Interest Expense | $259.00M$317.00M | −18.3% |
| Net Income | $258.00M$261.00M | −1.1% |
| EPS (Basic) | $0.60— | — |
| EPS (Diluted) | $0.59— | — |
| Shares Outstanding (Basic) | 430.00M435.00M | −1.1% |
| Shares Outstanding (Diluted) | 435.00M439.00M | −0.9% |
05—Questions
Frequently Asked Questions
What were the primary drivers for the sales decrease in 2021?
Sales decreased by 5% to $4.97 billion in 2021 primarily due to lower sales volumes in the commercial aerospace market, impacted by COVID-19 and production declines for aircraft like the Boeing 787. Lower sales volumes in the defense aerospace market also contributed to the decrease.
How did the company manage its debt and liquidity in 2021?
Howmet Aerospace focused on strengthening its balance sheet by reducing total debt by $843 million, ending the year with $4.23 billion in total debt. Cash provided from operations was $449 million, and the company maintained a strong liquidity position with $722 million in cash and equivalents.
What is the company's outlook for 2022?
Howmet Aerospace projects sales to increase in 2022, expecting robust growth in most of its key markets, supported by its strong market positions. Higher metal costs are also expected to contribute to increased sales. Management anticipates earnings per share to grow through continued focus on operational performance and capital efficiency.
How significant is the aerospace market to Howmet's revenue?
The aerospace market is Howmet's largest market, representing approximately 60% of the company's revenue in 2021. This includes both commercial and defense aerospace applications.
06—Continue