Howmet Aerospace reports Q3 EPS 71c, consensus 65c

Reports Q3 revenue $1.84B, consensus $1.85B…Adjusted EBITDA excluding special items of $487 million, up 27% year over year…Howmet Aerospace (HWM) Executive Chairman and Chief Executive Officer John Plant said, “The Howmet team delivered a healthy set of results in the third quarter 2024. The results exceeded the high end of guidance for Adjusted EBITDA, Adjusted EBITDA margin* and Adjusted earnings per share*. Revenue growth of 11% year over year took account of actions which restricted volumes shipped to the Boeing Company and notably weaker Europe market conditions impacting Forged Wheels. We are pleased that the Boeing strike was settled on November 4th, and we look forward to Boeing’s gradual production recovery. Engines spares volumes increased again in the quarter and are expected to be approximately $1.25 billion for the full year. Adjusted EBITDA* grew faster than revenue, up 27% year over year, resulting in margins up approximately 350 basis points to 26.5%. Adjusted earnings per share* grew 54%, while free cash flow was a third quarter record at $162 million.” Mr. Plant continued, “Turning to 2025, the demand outlook for commercial aerospace remains robust, driven by healthy air traffic growth. The under-production of aircraft in recent years has resulted in a very large order backlog which, combined with the significant needs for additional engine spare parts, is supportive of future revenue growth. We expect above-trend growth in commercial aerospace to continue in 2025, while we continue to take a cautious approach to the assumed pace of new aircraft builds. We expect growth in 2025 in our defense aerospace and industrial end markets, while we assume that the commercial transportation end market will remain soft until the second half 2025. Our 2025 outlook envisions total revenue growth of approximately 7.5% year over year.” “Howmet Aerospace’s balance sheet remains a source of strength, with leverage at a record low and free cash flow generation of approximately $600 million year to date through the third quarter 2024. Debt actions year to date will reduce annualized interest expense by approximately $33 million. The Company repurchased $100 million of common stock in the third quarter 2024 and repurchased an additional $90 million in October 2024, bringing October year-to-date repurchases to $400 million. Subject to Board approval, we also expect to increase the common stock dividend by 25% in the first quarter 2025 to $0.10 per share.”