- Revenue: $1.88 billion, up 14% year-over-year, surpassing estimates of $1.836 billion.
- Net Income: $266 million, an increase from $193 million in the second quarter of 2023.
- GAAP Earnings Per Share (EPS): $0.65, up from $0.46 in the same quarter last year.
- Operating Income Margin: 21.2%, up approximately 390 basis points year-over-year.
- Free Cash Flow: Generated $342 million in the second quarter of 2024.
- Share Repurchases: $60 million worth of common stock repurchased, with a $2 billion increase in repurchase authorization.
- Dividend Increase: Quarterly dividend raised by 60% to $0.08 per share.
On July 30, 2024, Howmet Aerospace Inc (HWM, Financial) released its 8-K filing reporting record second quarter 2024 results. The company, a leading provider of advanced engineered solutions for aerospace and transportation industries, achieved significant growth driven by the commercial aerospace sector.
Company Overview
Howmet Aerospace Inc produces products primarily used in aerospace, commercial transportation, and industrial markets. The company offers differentiated products such as airfoils with cooling and coatings for extreme temperature applications, specially designed fasteners for lightweight composite airframe construction, and lightweight aluminum commercial wheels. It operates through four segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels.
Performance Highlights
Howmet Aerospace reported a revenue of $1.88 billion for Q2 2024, marking a 14% increase year over year, driven by a 27% growth in the commercial aerospace market. The net income for the quarter was $266 million, or $0.65 per share, compared to $193 million, or $0.46 per share, in Q2 2023. This performance exceeded analyst estimates of $0.60 earnings per share and $1.836 billion in revenue.
Financial Achievements
Howmet Aerospace's operating income margin reached 21.2%, and the company generated $397 million in cash from operations. The company also reported an adjusted EBITDA of $483 million, up 31% year over year, with an adjusted EBITDA margin of 25.7%. These metrics are crucial as they reflect the company's operational efficiency and ability to generate cash flow, which is vital for sustaining growth and managing debt.
Income Statement and Balance Sheet Insights
Key details from the income statement include:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $1.88 billion | $1.65 billion |
| Net Income | $266 million | $193 million |
| Earnings Per Share | $0.65 | $0.46 |
From the balance sheet, Howmet Aerospace reported $123 million used for financing activities and $54 million for investing activities. The company also repurchased $60 million of common stock and declared a $0.08 per share dividend, a 60% increase from the previous quarter.
Segment Performance
Each segment showed notable performance:
| Segment | Revenue | Adjusted EBITDA | Adjusted EBITDA Margin |
|---|---|---|---|
| Engine Products | $933 million | $292 million | 31.3% |
| Fastening Systems | $394 million | $101 million | 25.6% |
| Engineered Structures | $275 million | $40 million | 14.5% |
| Forged Wheels | $278 million | $75 million | 27.0% |
Key Announcements and Future Outlook
Howmet Aerospace completed the early redemption of $205 million of its 5.125% Notes due October 2024, reducing annualized interest expense by approximately $12 million. The company also increased its share repurchase authorization by $2 billion to $2.487 billion and established a 2025 dividend policy with a payout ratio of 15% +/- 5% of net income excluding special items.
"In the second quarter 2024, the Howmet Aerospace team drove another very strong set of results, again exceeding the high end of guidance on all fronts," said Executive Chairman and CEO John Plant. "Revenue grew a healthy 14% year over year, with commercial aerospace revenue up 27%, continuing a strong trend."
Howmet Aerospace raised its full-year 2024 guidance, reflecting strong continued performance. The company now expects revenue between $7.4 billion and $7.48 billion, adjusted EBITDA between $1.855 billion and $1.875 billion, and adjusted earnings per share between $2.53 and $2.57.
For more detailed financial information and analysis, visit GuruFocus.com.
Explore the complete 8-K earnings release (here) from Howmet Aerospace Inc for further details.
