Howmet Aerospace Q4 Bottom-Line Beats Consensus; Sees Accelerating Revenue Growth Through 2022

Howmet Aerospace Inc HWM reported fourth-quarter revenue growth of 3.8% year-over-year to $1.29 billion, missing the consensus of $1.31 billion.
Segment sales: Engine Products $605 million (+9% Y/Y), Fastening Systems $256 million (-3% Y/Y), Engineered Structures $190 million (-12% Y/Y) and Forged Wheels $234 million (+15% Y/Y).
Adjusted EPS improved to $0.30 compared to $0.21 in 4Q20, above the consensus of $0.29.
The operating income decreased 33.5% Y/Y to $147 million, and the margin contracted by 640 bps to 11.4%. Adjusted operating margin expanded by 45 bps to 17.8%.
Howmet Aerospace generated cash from operating activities for FY21 of $449 million, compared to $9 million a year ago. Adjusted free cash flow was $517 million.
Adjusted EBITDA margin, excluding special items, was 23%.
At the end of the quarter, the company's cash balance was $722 million.
"The leading indicators for air travel continue to show improvement, particularly for domestic travel. We expect to see accelerating revenue growth through 2022 following a flat first quarter 2022 relative to fourth quarter 2021," commented Executive Chairman and CEO John Plant.
1Q22 Outlook: Howmet Aerospace expects revenue of $1.28 billion - $1.32 billion (consensus $1.34 billion) and adjusted EPS of $0.28- $0.30 (consensus $0.30).
It expects adjusted EBITDA of $286 million - $304 million and an Adjusted EBITDA margin of 22.4%- 23.0%.
FY22 Outlook: Howmet Aerospace revenue of ~$5.56 billion - $5.72 billion, versus the consensus of $5.62 billion. Adjusted EPS of $1.31 - $1.43, versus the consensus of $1.40.
The company expects adjusted EBITDA of $1.265 billion - $1.335 billion, Adjusted EBITDA margin of 22.8% - 23.3%, and Adj. Free Cash Flow of $575 million - $675 million.
Price Action: HWM shares traded higher by 2.97% at $32.56 on the last check Wednesday.

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