Howmet Aerospace Flies High: Clocks 11% Revenue Growth In Q3 Despite Boeing Strike And European Weakness, Eyes Dividend Hike

Howmet Aerospace Inc. HWM shares are trading higher after mixed third-quarter financial results and a revised annual outlook.

Revenue grew 11% year-over-year to $1.84 billion, missing the consensus of $1.852 billion, driven by growth in the commercial aerospace of 17% Y0Y.

Revenue by Segments: Engine Products $945 million (+18% YoY); Fastening Systems $392 million (+13% YoY); Engineered Structures $253 million (+11% YoY); and Forged Wheels $245 million (-14% YoY).

Adjusted EBITDA excluding special items was $487 million (+27% YoY), and the margin was 26.5%, up from 23% YoY. Operating income increased by 37.1% YoY to $421 million, and the margin expanded by 443 bps to 22.9%.

Adjusted EPS stood at $0.71 (+54% YoY), beating the consensus of $0.65.

Howmet Aerospace’s operating cash flow stood at $244 million, and its free cash flow was $162 million. At the end of the quarter, the company’s cash balance was $475 million.

Howmet Aerospace repurchased $100 million in shares during the quarter at an average price of $94.22 per share, with an additional $90 million repurchased in October 2024, bringing total year-to-date buybacks to $400 million.

Dividend: Pending Board approval, Howmet Aerospace plans to raise the common stock dividend by 25% in the first quarter of 2025, bringing it to $0.10 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,” commented Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant.

Q4 Outlook: Howmet Aerospace expects revenue of $1.85 billion – $1.89 billion, versus the consensus of $1.89 billion, and adjusted EPS of $0.70 – $0.72, versus the consensus of $0.69.

FY24 Outlook Updated: Howmet Aerospace lowered its revenue outlook to $7.39 billion – $7.43 billion (prior $7.40 billion – $7.48 billion) versus the consensus of $7.446 billion and raised adjusted EPS guidance to $2.65 – $2.67 (prior $2.53 – $2.57) vs. the consensus of $2.59.

For 2025, the company envisions total revenue growth of approximately 7.5% year over year.

“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,” Plant added.

Price Action: HWM shares are trading higher by 9.28% at $111.64 at the last check Wednesday.