Summary
Howmet Aerospace Inc. (HWM), formerly Arconic Inc., reported a net loss of $121 million for the second quarter of 2019, a significant shift from the $120 million net income in the same period of 2018. This downturn was largely driven by substantial restructuring and other charges, most notably a $428 million impairment of long-lived assets within the Engineered Products and Solutions segment. Despite a 3% increase in total sales to $3.69 billion for the quarter, the company faced increased operating expenses, including higher Selling, General, and Administrative (SG&A) costs related to the planned separation into two independent companies. The company is undergoing a significant strategic transformation, with plans to separate into two independent entities: Howmet Aerospace Inc. (focused on Engineered Products and Forgings) and Arconic Corporation (focused on Global Rolled Products). This separation is targeted for completion in the second quarter of 2020 and is a key factor influencing operational decisions and financial reporting. Investors should monitor the execution of this separation and its impact on future financial performance and business strategy.
Financial Highlights
50 data points| Revenue | $1.82B |
| R&D Expenses | $7.00M |
| SG&A Expenses | $102.00M |
| Operating Income | -$176.00M |
| Interest Expense | $86.00M |
| Net Income | -$121.00M |
| EPS (Basic) | $-0.27 |
| EPS (Diluted) | $-0.27 |
| Shares Outstanding (Basic) | 445.00M |
| Shares Outstanding (Diluted) | 445.00M |
Key Highlights
- 1Reported a net loss of $121 million in Q2 2019, compared to a net income of $120 million in Q2 2018.
- 2Total sales increased by 3% to $3.69 billion in Q2 2019, driven by volume growth across segments and favorable aerospace pricing.
- 3Significant restructuring and other charges of $499 million in Q2 2019, primarily due to a $428 million impairment of long-lived assets in the Engineered Products and Solutions segment.
- 4Planned separation into two independent companies, Howmet Aerospace Inc. and Arconic Corporation, targeted for Q2 2020.
- 5Aggressive share repurchase program initiated, with $900 million repurchased in the first six months of 2019.
- 6Operating cash flow was negative at $(152) million for the first six months of 2019, primarily due to working capital changes and significant restructuring payments.
- 7Environmental remediation reserves stand at $275 million as of June 30, 2019, with the Massena, NY Grasse River project being a significant component.