10-KPeriod: FY2022

Howmet Aerospace Inc. Annual Report, Year Ended Dec 31, 2022

Filed February 14, 2023For Securities:HWM

Summary

Howmet Aerospace Inc. reported strong sales growth in 2022, driven primarily by a rebound in the commercial aerospace market. Sales increased by 14% to $5.66 billion, with significant contributions from the Engine Products segment. The company also saw improvements in income from continuing operations and Segment Adjusted EBITDA, reflecting effective cost management and favorable product pricing. While the commercial aerospace market is still recovering from pandemic impacts, particularly the wide-body aircraft sector, Howmet is well-positioned for continued growth, anticipating further demand increases in 2023. The company demonstrated a strong financial position with solid cash flow from operations of $733 million and ample cash on hand. Howmet continued its commitment to shareholder returns through share repurchases totaling $400 million and paid out $44 million in dividends. The company also managed its debt effectively, reducing its total debt to $4.16 billion. Management projects continued sales and earnings per share growth in 2023, supported by a focus on operational performance and capital efficiency.

Financial Highlights

52 data points
Beta

Revenue

$5.66B

Net Income

$469.00M

8.3% Net Margin

EPS (Diluted)

$1.11

Total Assets

$10.26B

Cash & Equivalents

$792.00M

Free Cash Flow

$540.00M

Financial Statements
Beta
Revenue$5.66B
R&D Expenses$32.00M
SG&A Expenses$288.00M
Operating Income$919.00M
Interest Expense$229.00M
Net Income$469.00M
EPS (Basic)$1.12
EPS (Diluted)$1.11
Shares Outstanding (Basic)416.00M
Shares Outstanding (Diluted)421.00M

Key Highlights

  • 1Total sales increased by 14% to $5.66 billion in 2022, driven by recovery in commercial aerospace and favorable pricing.
  • 2Segment Adjusted EBITDA grew by 13% to $1.35 billion, indicating improved operational performance and profitability.
  • 3Cash provided from operations was a robust $733 million, demonstrating strong cash generation capabilities.
  • 4Howmet repurchased approximately $400 million of its common stock, signaling confidence in its financial health and commitment to shareholder returns.
  • 5The company's net income from continuing operations significantly increased by 82% to $469 million, or $1.11 per diluted share.
  • 6Management anticipates continued sales and earnings growth in 2023, with a focus on operational performance and capital efficiency.
  • 7The company's market capitalization grew significantly, with stock price increasing 199% since the April 2020 separation, outperforming market indices over the same period.

Frequently Asked Questions

Howmet Aerospace's sales in 2022 increased by 14% to $5.66 billion. This growth was primarily driven by higher sales in the commercial aerospace market, an increase in material cost pass-through, and favorable product pricing. The Engine Products segment, in particular, saw significant growth due to higher volumes in commercial aerospace and industrial gas turbine markets.

In 2022, Howmet Aerospace demonstrated strong financial management. Cash provided from operations was $733 million, and the company ended the year with $791 million in cash and cash equivalents. Total debt was reduced to $4.16 billion. The company actively repurchased $400 million of its common stock and paid $44 million in dividends, indicating a commitment to enhancing shareholder value while maintaining a solid financial position.

For 2023, Howmet Aerospace projects continued sales growth, expecting a solid performance in the commercial aerospace market. The company also anticipates earnings per share growth due to its ongoing focus on operational performance and capital efficiency. Cash flow from operations is expected to increase compared to 2022, and capital expenditures are projected to be lower than depreciation and amortization.

The commercial aerospace market is a significant revenue driver for Howmet Aerospace, accounting for approximately 46% of its revenue in 2022. While the market is still recovering from the COVID-19 pandemic, especially in the wide-body aircraft sector, Howmet is experiencing growth, particularly in narrow-body aircraft demand. The company expects this trend to continue, contributing positively to its 2023 performance.