Financial Performance - Sales increased to $1,835 million in Q3 2024, up 11% from $1,658 million in Q3 2023, and $5,539 million for the nine months ended September 30, 2024, up 13% from $4,909 million in the same period last year[71]. - Net income for Q3 2024 was $332 million, or $0.81 per diluted share, compared to $188 million, or $0.45 per diluted share in Q3 2023, and $841 million, or $2.04 per diluted share for the nine months ended September 30, 2024, compared to $529 million, or $1.27 per diluted share in the same period last year[73]. - Total Segment Adjusted EBITDA increased to $511 in Q3 2024, up from $402 in Q3 2023, reflecting improved operating performance[82]. Cost Management - Cost of goods sold (COGS) as a percentage of sales decreased to 68.3% in Q3 2024 from 71.4% in Q3 2023, and to 69.1% from 72.2% for the nine months ended September 30, 2024, primarily due to higher volumes and favorable product pricing[71]. - SG&A expenses were $85 million in Q3 2024, a slight decrease from $87 million in Q3 2023, while increasing to $270 million for the nine months ended September 30, 2024, up from $250 million in the same period last year[71]. - Interest expense, net decreased to $44 million in Q3 2024, down 19% from $54 million in Q3 2023, due to early redemptions of certain notes[72]. Market Segments Performance - Segment Adjusted EBITDA for the Engine Products segment increased by $88 million, or 40%, in Q3 2024 compared to Q3 2023, driven by growth in commercial aerospace and defense aerospace markets[75]. - Fastening Systems segment third-party sales increased by $44, or 13%, in Q3 2024 compared to Q3 2023, primarily due to growth in the commercial aerospace market[77]. - Engineered Structures segment third-party sales increased by $156, or 25%, for the nine months ended September 30, 2024, compared to the same period in 2023, mainly due to growth in commercial and defense aerospace markets[78]. - Forged Wheels segment third-party sales decreased by $40, or 14%, in Q3 2024 compared to Q3 2023, primarily due to lower volumes in the commercial transportation market[80]. Tax and Headcount - The estimated annual effective tax rate for Q3 2024 was 20.9%, down from 23.0% in Q3 2023, primarily due to net benefits related to U.S. federal and state R&D credits[72]. - The company absorbed approximately 235 net headcount in the Engine Products segment in Q3 2024 to support expected revenue increases[75]. Cash Flow and Financing - Cash provided from operations was $818 million for the nine months ended September 30, 2024, compared to $443 million for the same period in 2023, an increase of $375 million[84]. - Cash used for financing activities increased by $96 million, or 15%, in the nine months ended September 30, 2024, primarily due to long-term debt payments and increased common stock repurchases[85]. - Cash used for investing activities increased by $46 million, or 28%, to $209 million in the nine months ended September 30, 2024, primarily due to capital expenditures related to capacity expansion projects[88]. Strategic Initiatives - Howmet acquired Camcraft LTD for approximately $5 million in October 2024, enhancing its Engine Products segment capabilities[76]. - The company has established a commercial paper program allowing for issuance up to $1 billion for general corporate purposes[86]. - The company's effective shelf registration statement allows for opportunistic issuance of new debt securities to refinance existing indebtedness[86]. Credit Ratings and Outlook - Moody's upgraded Howmet's short-term debt rating from P-3 to P-2 and long-term debt rating from Baa3 to Baa1 on August 6, 2024, citing improved financial leverage and market demand[87]. - The three major credit rating agencies have rated Howmet's debt with investment grade ratings, reflecting stable to positive outlooks[87]. - The company anticipates continued demand in the commercial aerospace market, which supports its financial outlook[87]. Risk Management - There have been no material changes in risk factors since the last annual report, indicating stability in the company's risk environment[93]. - The company reported no changes in internal control over financial reporting during the third quarter of 2024[91].

Financial Data and Key Metrics Changes - Year-over-year revenue growth was 11%, building on the 14% growth in the first half [8][14] - EBITDA reached a record $487 million with a margin of 26.5%, while operating income was $419 million with a margin of 22.8%, up 33% year-over-year [9][11] - Earnings per share increased by 54% year-over-year to $0.71, and free cash flow was strong at $162 million, improving year-to-date free cash flow to approximately $600 million [10][11] Business Line Data and Key Metrics Changes - Commercial aerospace revenue grew by 17%, continuing a strong trend, while defense aerospace was up 15% [15] - Engine Products revenue increased by 18% year-over-year to $945 million, with EBITDA up 40% to a record $307 million [28][29] - Fastening Systems revenue increased by 13% year-over-year to $392 million, with EBITDA up 34% [30][31] - Engineered Structures revenue increased by 11% year-over-year to $253 million, with EBITDA up 27% [32] - Forged Wheels revenue decreased by 14% year-over-year due to a slowdown in the commercial transportation market [33] Market Data and Key Metrics Changes - Commercial transportation market revenue was down 12%, led by a slowdown in Europe [16] - Industrial and other markets were up 17%, driven by oil and gas, which was up 26% [16] - North America revenues for wheels were down by 10% [13] Company Strategy and Development Direction - The company expects commercial aerospace growth to be about 12% in 2025, with total revenue growth of about 7.5% [39][48] - The strategic positioning of the company is improving, with aftermarket exposure rising from 11% in 2019 to 17% in 2024, expected to exceed 20% in the coming years [58][60] - The company is considering potential acquisitions while maintaining a disciplined approach to capital deployment [106][109] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for air travel and aircraft production, despite some uncertainties regarding Boeing's production rates [36][39] - The company anticipates continued strong performance in commercial aerospace and defense aerospace, with expectations for increased spares demand [66][88] - Management highlighted the importance of addressing supply chain constraints and the potential for improved performance in the wider supply chain [84] Other Important Information - The company completed a study resulting in a favorable R&D tax credit of approximately $44 million, reflecting continued investment in innovation [34] - The balance sheet remains strong, with a cash balance of $475 million and a record low net debt to EBITDA of 1.6 times [19][20] Q&A Session Summary Question: Thoughts on commercial build rates for 2025 - Management indicated uncertainty regarding specific build rates for Boeing and Airbus, suggesting a cautious approach to projections [51][52] Question: Aerospace aftermarket revenues and risk of destocking - Management expects spares revenue to reach about $1.25 billion, with aftermarket exposure increasing significantly [57][59] Question: Production capacity planning for new blades - Management confirmed ongoing investments in engine production capacity to meet increasing demand for both OE production and spares [70][74] Question: Incremental margins in Q4 - Management refrained from providing specific margin guidance for next year, citing uncertainty and the need for increased labor training [78][80] Question: Expectations for aero revenue growth in 2026 - Management expressed optimism for further improvements in aircraft production and spares demand, anticipating a positive trajectory for 2026 [88][89] Question: Capital deployment focus and M&A opportunities - Management is open to considering acquisitions but emphasizes a disciplined approach to capital deployment, including stock buybacks [106][109]

Core Insights - Howmet (HWM) reported revenue of $1.84 billion for Q3 2024, a year-over-year increase of 10.7% [1] - The EPS for the quarter was $0.71, up from $0.46 a year ago, exceeding the consensus estimate of $0.65 by 9.23% [1] - Revenue fell slightly short of the Zacks Consensus Estimate of $1.85 billion, resulting in a surprise of -1.03% [1] Financial Performance Metrics - Adjusted EBITDA for Engine Products was $307 million, surpassing the average estimate of $291.12 million [3] - Adjusted EBITDA for Forged Wheels was $64 million, slightly below the average estimate of $66.07 million [3] - Adjusted EBITDA for Engineered Structures was $38 million, compared to the average estimate of $39 million [3] - Adjusted EBITDA for Fastening Systems was $102 million, exceeding the average estimate of $98.18 million [3] Stock Performance - Howmet's shares have returned -0.8% over the past month, while the Zacks S&P 500 composite increased by 0.7% [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [4]

Third Quarter 2024 Earnings Call John Plant: Executive Chairman and Chief Executive Officer Ken Giacobbe: EVP and Chief Financial Officer November 6, 2024 Important Information Forward–Looking Statements This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "anticipates," "believes," "coul ...

Howmet (HWM) came out with quarterly earnings of $0.71 per share, beating the Zacks Consensus Estimate of $0.65 per share. This compares to earnings of $0.46 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 9.23%. A quarter ago, it was expected that this maker of engineered products for the aerospace and other industries would post earnings of $0.60 per share when it actually produced earnings of $0.67, delivering a surprise of ...

Core Viewpoint - Howmet Aerospace Inc. is expected to report strong third-quarter 2024 earnings, with a consensus estimate indicating significant revenue and earnings growth compared to the previous year [1][7]. Revenue Performance - The Engine products segment is projected to generate revenues of $945 million, reflecting a 17.9% increase from the third quarter of 2023, driven by strong demand in commercial aerospace and defense markets [3]. - The Fastening Systems segment is estimated to achieve revenues of $386 million, marking a 10.9% rise year-over-year, supported by growth in the commercial aerospace market [4]. - The Engineered Structures segment is expected to report revenues of $270 million, indicating an 18.9% increase from the previous year, bolstered by recovery in the commercial and defense aerospace markets [5]. - Conversely, the Forged Wheels segment is anticipated to see revenues of $258 million, representing a decline of 9.5% year-over-year, attributed to softness in the commercial transportation market [6]. Overall Financial Outlook - The overall revenue estimate for Howmet Aerospace is pegged at $1.85 billion, which indicates an 11.8% increase from the same quarter last year [7]. - The consensus estimate for adjusted earnings is set at 65 cents per share, reflecting a growth of 41.3% compared to the previous year [7]. Earnings Prediction - The company has a positive Earnings ESP of +1.86%, with the Most Accurate Estimate at $1.24 per share, higher than the Zacks Consensus Estimate of $1.22, suggesting a strong likelihood of an earnings beat [9].

Core Insights - Howmet (HWM) is expected to report quarterly earnings of $0.65 per share, a 41.3% increase year-over-year, with revenues projected at $1.85 billion, reflecting an 11.8% year-over-year growth [1] - The consensus EPS estimate has been revised upward by 0.2% in the last 30 days, indicating analysts' reassessment of their initial estimates [2] - Analysts emphasize the importance of earnings estimate revisions as indicators for predicting investor actions and stock price performance [3] Revenue Estimates - Total Sales for Engine Products are forecasted to reach $944.77 million, representing a 17.7% year-over-year increase [4] - Total Sales for Fastening Systems are expected to be $385.76 million, indicating a 10.9% year-over-year growth [5] - Total Sales for Engineered Structures are projected at $270.33 million, reflecting a 19.1% year-over-year increase [5] - Total Sales for Forged Wheels are estimated at $257.60 million, suggesting a 9.6% year-over-year decline [5] End Market Revenue Estimates - End Market Revenue for Aerospace-Commercial is expected to be $997.87 million, indicating a 21.7% year-over-year increase [6] - End Market Revenue for Aerospace-Defense is projected at $291.67 million, reflecting a 16.2% year-over-year growth [6] - End Market Revenue for Commercial Transportation is estimated at $319.48 million, suggesting a 9.2% year-over-year decline [7] - End Market Revenue for Industrial and Other is expected to reach $255.43 million, indicating an 8.7% year-over-year increase [7] Adjusted EBITDA Estimates - Adjusted EBITDA for Engine Products is projected at $291.12 million, up from $219 million in the same quarter last year [8] - Adjusted EBITDA for Forged Wheels is expected to be $66.07 million, down from $77 million year-over-year [8] - Adjusted EBITDA for Engineered Structures is forecasted at $39.00 million, compared to $30 million in the prior year [9] - Adjusted EBITDA for Fastening Systems is estimated at $98.18 million, up from $76 million year-over-year [9] Stock Performance - Shares of Howmet have experienced a -1% change in the past month, mirroring the -1% movement of the S&P 500 composite [9][10] - Howmet holds a Zacks Rank 3 (Hold), indicating expected performance in line with the overall market [10]

In the latest market close, Howmet (HWM) reached $101.14, with a +1.05% movement compared to the previous day. The stock outpaced the S&P 500's daily loss of 0.33%. Elsewhere, the Dow lost 0.22%, while the tech-heavy Nasdaq lost 0.56%. Shares of the maker of engineered products for the aerospace and other industries witnessed a loss of 0.82% over the previous month, beating the performance of the Aerospace sector with its loss of 6.93% and underperforming the S&P 500's gain of 1.83%. Investors will be eager ...

Group 1: Investment Activity - Michael McCaul, a congressional representative, invested between $100,001 and $250,000 in Howmet Aerospace (NYSE: HWM) on September 16, when shares were priced at $94.59 [1] - Since McCaul's purchase, HWM shares have increased by 10.12%, and the Congressman could potentially gain between $10,120 and $25,300 from this trade [1][2] Group 2: Company Overview - Howmet Aerospace is a significant supplier for major contractors, including Lockheed Martin (NYSE: LMT), providing titanium and involved in a legal dispute over supply prices settled on May 3 [2] - The company is not a direct defense contractor but benefits from increased defense spending amid geopolitical instability and upcoming elections [2] Group 3: Market Sentiment and Analyst Ratings - Wall Street analysts are cautiously optimistic about HWM, with a consensus rating of 'Strong Buy' from 17 equity researchers [4] - Deutsche Bank analyst Scott Deuschle raised the price target for HWM from $106 to $125, anticipating an earnings beat and increased guidance in the upcoming earnings call on November 6 [4] - The average price target for HWM is $109.36, indicating a potential increase of 5.24% from the current share price [4]

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