Skip to content
AnalystLens

Howmet Aerospace Inc. 8-K Report, Financial Results (Nov 6, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed November 6, 2024
Period End
November 6, 2024
Security
HWM
In the record · 2016–202610-K1110-Q328-K223

HWM filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 223 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Jul ’18Jul ’18
  2. Leadership change8-K · Dec ’20Dec ’20
  3. Leadership change8-K · Dec ’22Dec ’22
  4. Deal closed8-K · Apr ’26Apr ’26

01—Abstract

Summary

Summary of the 8-K filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.

Howmet Aerospace (HWM) reported third-quarter 2024 results on November 6, 2024, with revenue of $1.84 billiona, up 11% year over year, led by commercial aerospace growth of 17% that more than offset a 12% decline in commercial transportation.

GAAP net income rose to $332 millionb ($0.81 per share) from $188 million ($0.45) a year earlier, though that figure includes roughly $42 million of net benefits from special items, most notably a $44 million discrete tax benefit from additional R&D credits. Excluding special items, adjusted EPS was $0.71, up 54%, and adjusted EBITDA was $487 million, up 27%, with the adjusted EBITDA margin expanding about 350 basis points to 26.5%. Engine Products drove much of the profit improvement, with segment adjusted EBITDA margin reaching a record 32.5%, while Forged Wheels weakened on lower commercial transportation volumes and softer European conditions.

Cash generation and capital allocation were also strong. Free cash flow was a third-quarter record of $162 millionc, and year-to-date free cash flow reached about $599 million. The company retired its 2024 and 2025 notes, issued $500 million of 2031 notes, and expects these debt actions to cut annualized interest expense by roughly $33 million.

Management repurchased $100 milliond of stock in the quarter, another $90 million in October, and plans a 25% dividend increase to $0.10 per share in the first quarter of 2025, subject to Board approval. Management raised full-year 2024 guidance for adjusted EBITDA and adjusted EPS, and it gave preliminary 2025 revenue guidance of roughly 7.5% growth, citing commercial aerospace demand and a large order backlog while assuming commercial transportation stays soft until the second half of 2025.

For investors, the central takeaways are margin expansion driven by commercial aerospace, a strengthened balance sheet with leverage at a record low, and a shift toward shareholder returns. Watch the quality of earnings given the one-time tax benefit in GAAP net income, the continued softness in Forged Wheels, and the pace of Boeing's production recovery following the strike settlement on November 4, 2024.

02—Key points

Key Highlights

  1. Q3 2024 revenue of $1.84B rose 11% year over year, driven by commercial aerospace (+17%), partially offset by commercial transportation (-12%).
  2. GAAP EPS of $0.81 (net income $332M) compares with $0.45 a year earlier, but includes about $42M in net special-item benefits, largely a $44M discrete tax benefit from prior-year R&D credits.
  3. Adjusted EPS excluding special items was $0.71, up 54% year over year; adjusted EBITDA was $487M, up 27%, with margin up about 350 bps to 26.5%.
  4. Engine Products delivered a record 32.5% segment adjusted EBITDA margin on 18% revenue growth, while Forged Wheels revenue fell 14% and its margin declined about 90 bps.
  5. Q3 free cash flow was a record $162M, bringing year-to-date FCF to roughly $599M; leverage reached a record low.
  6. Debt actions reduced annualized interest expense by about $33M; the company repurchased $100M of stock in Q3 and another $90M in October, and plans a 25% dividend increase to $0.10 in Q1 2025 (subject to Board approval).
  7. Full-year 2024 guidance was raised for adjusted EBITDA and adjusted EPS (adjusted EPS $2.65–$2.67); preliminary 2025 revenue guidance calls for about 7.5% growth.

03—Questions

Frequently Asked Questions

  1. Did Howmet's Q3 2024 earnings include one-time items that flatter GAAP results?

    Yes. GAAP net income of $332M included about $42M in net special-item benefits, mainly a $44M discrete tax benefit from additional U.S. federal and state R&D credits claimed for prior years. Excluding special items, net income was $290M, or $0.71 per diluted share, compared with GAAP EPS of $0.81.

  2. What is driving Howmet's margin expansion?

    Growth in commercial aerospace, especially high-margin engine products and fastening systems, is the main driver. Adjusted EBITDA margin excluding special items rose about 350 bps to 26.5%, and Engine Products reached a record 32.5% segment margin on higher volumes and operating leverage.

  3. How strong is Howmet's balance sheet and cash flow position?

    The company generated $162M of Q3 free cash flow and about $599M year to date. It retired the 5.125% 2024 notes and the 6.875% 2025 notes, issued $500M of 2031 notes, and reports leverage at a record low. All outstanding debt is unsecured and fixed-rate, with the next maturity in November 2026.

  4. What does the outlook look like for 2024 and 2025?

    For full-year 2024, Howmet raised adjusted EBITDA guidance to $1.885B–$1.905B and adjusted EPS guidance to $2.65–$2.67. Preliminary 2025 guidance calls for revenue growth of about 7.5%, supported by commercial aerospace demand and a large backlog, while commercial transportation is assumed to remain soft until the second half of 2025.

  5. How is Howmet returning capital to shareholders?

    Howmet repurchased $100M of stock in Q3 2024 at an average price of $94.22 and an additional $90M in October 2024, bringing October year-to-date repurchases to $400M. As of October 31, 2024, $2.297B of repurchase authorization remained. The company also raised its quarterly dividend 60% to $0.08 and plans a further 25% increase to $0.10 in Q1 2025, subject to Board approval.

04—Continue

← View all 8-K filings