Financial Performance - Sales for the first quarter of 2025 were $1,942 million, an increase of $118 million or 6% compared to $1,824 million in the first quarter of 2024, driven by growth in commercial aerospace and defense markets [96]. - Net income for the first quarter of 2025 was $344 million, or $0.84 per diluted share, compared to $243 million, or $0.59 per diluted share in the first quarter of 2024, reflecting a $101 million increase [106]. - In the first quarter of 2025, income before income taxes increased to $446 million, up from $303 million in the first quarter of 2024, representing a growth of 47% [126]. - Total Segment Adjusted EBITDA for the first quarter of 2025 was $580 million, compared to $460 million in the same period of 2024, reflecting a 26% increase [126]. - Cash provided from operations rose to $253 million in the first quarter of 2025, a 43% increase from $177 million in the first quarter of 2024 [131]. Segment Performance - Engine Products segment third-party sales increased by $111 million or 13% in the first quarter of 2025, reaching $996 million, primarily due to growth in commercial and defense aerospace markets [110]. - Fastening Systems segment third-party sales rose by $23 million or 6% in the first quarter of 2025, totaling $412 million, driven by growth in the commercial aerospace market [114]. - Engineered Structures segment third-party sales increased by $20 million or 8% in the first quarter of 2025, reaching $282 million, mainly due to growth in the defense aerospace market [118]. - Forged Wheels segment third-party sales decreased by $36 million or 13% in the first quarter of 2025, totaling $252 million, primarily due to lower volumes in the commercial transportation market [122]. - Segment Adjusted EBITDA for the Engine Products segment increased by $76 million or 31% in the first quarter of 2025, reaching $325 million [111]. - Segment Adjusted EBITDA Margin for the Fastening Systems segment increased by approximately 710 basis points in the first quarter of 2025, reaching 30.8% [116]. Cost and Expenses - Cost of goods sold (COGS) as a percentage of sales decreased to 66.4% in the first quarter of 2025 from 70.7% in the first quarter of 2024, attributed to higher volumes and favorable product pricing [97]. - Interest expense, net decreased by $10 million or 20% in the first quarter of 2025, totaling $39 million, due to early redemptions of debt [100]. - Corporate expenses decreased by $4 million, or 15%, in the first quarter of 2025 compared to the first quarter of 2024, mainly due to lower legal costs [128]. Cash Flow and Investments - Cash used for investing activities increased to $115 million in the first quarter of 2025, up 53% from $75 million in the first quarter of 2024, primarily due to higher capital expenditures [143]. - Cash used for financing activities decreased to $167 million in the first quarter of 2025, down 6% from $178 million in the first quarter of 2024 [133]. Dividends and Ratings - The Board of Directors declared a quarterly dividend of $0.10 per share on January 27, 2025, reflecting a $0.05 increase from the previous quarter [134]. - Fitch Ratings upgraded Howmet's short-term debt rating from F2 to F1 and long-term debt rating from BBB to BBB+, citing strong free cash flow generation [140]. Future Outlook - The company expects pension contributions and other postretirement benefit payments in 2025 to be approximately $65 million [132]. - The company anticipates demand in the commercial transportation markets will not recover before mid-2025 due to economic uncertainties [125].

Core Insights - Howmet Aerospace Inc. reported adjusted earnings of 86 cents per share for Q1 2025, exceeding the Zacks Consensus Estimate of 77 cents, marking a 51% year-over-year increase [1] - Total revenues reached $1.94 billion, surpassing the consensus estimate of $1.93 billion, with a 6% increase from the previous year, driven by strength in the commercial aerospace market [1] Segment Performance - The Engine Products segment generated revenues of $996 million, accounting for 51.3% of total revenues, with a 13% year-over-year increase, supported by growth in commercial aerospace, defense aerospace, industrial gas turbine, and oil and gas markets [2] - The Fastening Systems segment reported revenues of $412 million, representing 21.3% of total revenues, with a 6% year-over-year increase, primarily due to growth in the commercial aerospace market, though partially offset by weakness in commercial transportation [3] - The Engineered Structures segment's revenues increased 8% year-over-year to $282 million, representing 14.5% of total revenues, benefiting from growth in the defense aerospace market [4] - The Forged Wheels segment's revenues totaled $252 million, accounting for 12.9% of total revenues, down 12.5% year-over-year due to lower volumes in the commercial transportation market [5] Financial Metrics - Cost of goods sold remained flat year-over-year at $1.29 billion, while selling, general, and administrative expenses decreased by 3.4% to $85 million [6] - Adjusted EBITDA rose 28% year-over-year to $560 million, with an adjusted EBITDA margin increasing by 480 basis points to 28.8% [6] - Adjusted operating income increased 33% year-over-year to $491 million, with an adjusted operating income margin of 25.3%, up 500 basis points [7] Balance Sheet and Cash Flow - As of the end of Q1 2025, Howmet had cash and cash equivalents of $536 million, down from $564 million at the end of Q4 2024, with long-term debt stable at $3.31 billion [8] - Net cash generated from operating activities was $253 million, compared to $177 million in the same period last year, with capital spending totaling $119 million [9] - Free cash flow for the quarter was $134 million, with dividends paid out amounting to $42 million, up from $21 million a year ago, and share repurchases totaling $125 million [9] Future Outlook - For Q2 2025, Howmet expects revenues between $1.98 billion and $2.0 billion, with adjusted EBITDA projected between $555 million and $565 million, and adjusted earnings per share estimated at 85-87 cents [11] - For the full year 2025, revenues are anticipated to be in the range of $7.88 billion to $8.18 billion, with adjusted EBITDA expected between $2.225 billion and $2.275 billion, and adjusted earnings per share forecasted at $3.36-$3.44 [12]

Financial Data and Key Metrics Changes - Q1 2025 revenue reached a record high, increasing by 6% year over year, with an EBITDA margin of 28.8% and an operating margin of 25.3%, up 500 basis points year over year [5][12][14] - Free cash flow was positive at $134 million, marking a record for the first quarter, with a 25% increase in dividends and $125 million in share buybacks [6][14][16] - Earnings per share (EPS) was $0.86, reflecting a 51% increase year over year [12][14] Business Line Data and Key Metrics Changes - **Engines Segment**: Revenue increased by 13% year over year to $996 million, with EBITDA up 31% to $325 million and an EBITDA margin of 32.6% [17] - **Fastening Systems**: Revenue grew by 6% year over year to $412 million, with EBITDA increasing by 38% to $127 million and an EBITDA margin of 30.8% [18][19] - **Engineered Structures**: Revenue rose by 8% year over year to $282 million, with EBITDA up 62% to $60 million and an EBITDA margin of 21.3% [20] - **Forged Wheels**: Revenue decreased by 13% year over year but increased by 4% sequentially, with an EBITDA margin of 27% [21] Market Data and Key Metrics Changes - **Commercial Aerospace**: Revenue increased by 9% year over year, driven by demand for engine spares and a record backlog for new aircraft [10] - **Defense Aerospace**: Grew by 19% year over year, supported by demand for engine spares and new builds [10] - **Commercial Transportation**: Revenue declined by 14% year over year, although it showed a 2% sequential increase [10] - **Industrial and Other Markets**: Revenue increased by 10%, with oil and gas up 21% and IGT up 12% [11] Company Strategy and Development Direction - The company is focused on continued investments for growth, particularly in engine markets and capacity expansions in major regions [9][28] - There is a commitment to managing energy consumption and environmental impacts, with a target of reducing greenhouse gas emissions [22] - The company aims to strengthen its balance sheet and maintain a fortress-like financial position amid market uncertainties [40][84] Management's Comments on Operating Environment and Future Outlook - Management noted that while air traffic growth is slower, there is resilience in customer demand due to underbuilding of aircraft in recent years [24][26] - The outlook for commercial truck builds is uncertain due to North American economic conditions and tariff impacts [29] - The company expects revenue guidance for Q2 2025 to be around $1.99 billion, with EBITDA of $560 million and EPS of $0.86 [31][32] Other Important Information - The company received a credit rating upgrade from Fitch from BBB to BBB+, reflecting improved financial leverage and strong cash generation [14] - The company has a remaining authorization for share repurchases of approximately $2 billion as of April 2025 [16] Q&A Session Summary Question: Impact of air traffic growth on structures and fasteners - Management indicated that overall demand for travel is important for future investment and volume assumptions, but the backlog in aircraft manufacturing provides some protection [35][36] Question: Progress on upgraded turbine airfoils and certification timing - Production is on track, with certification for the LEAP-1B expected by the end of the calendar year [43][44] Question: Margin improvements in fastening systems and engineered structures - Improvements are attributed to enhanced process control and operational efficiencies, with expectations for sustainability [50][51] Question: Update on production rates for the 737 and widebody aircraft - Production rates for the 737 have been increased, while widebody production has faced delays but demand remains strong [57][58] Question: Tariff impacts and mitigation strategies - The gross impact of tariffs is estimated at $80 million, with a net impact of less than $15 million after mitigation efforts [88][92]

Financial Data and Key Metrics Changes - Q1 2025 revenue reached a record high, increasing by 6% year over year, with an EBITDA margin of 28.8% and an operating margin of 25.3%, up 500 basis points year over year [4][10] - Free cash flow was positive at $134 million, marking a record for the first quarter, with a 25% increase in dividends and $125 million in share buybacks [5][12] - EBITDA increased by 28% year over year, with earnings per share rising by 51% to $0.86 [10][11] Business Line Data and Key Metrics Changes - Engines segment revenue increased by 13% year over year to $996 million, with EBITDA up 31% to $325 million and an EBITDA margin of 32.6% [15] - Fastening Systems revenue grew by 6% year over year to $412 million, with EBITDA increasing by 38% to $127 million and an EBITDA margin of 30.8% [16] - Engineered Structures revenue rose by 8% year over year to $282 million, with EBITDA up 62% to $60 million and an EBITDA margin of 21.3% [17] - Forged Wheels revenue decreased by 13% year over year but increased by 4% sequentially, with an EBITDA margin of 27% [18] Market Data and Key Metrics Changes - Commercial aerospace revenue was up 9% year over year, driven by demand for engine spares, while defense aerospace grew by 19% [8] - Commercial transportation faced challenges with a 14% revenue decline in Q1, although it was up 2% sequentially [8][9] - Industrial and other markets saw a 10% increase, with oil and gas up 21% and IGT up 12% [9] Company Strategy and Development Direction - The company is focused on continued investments for growth, particularly in engine markets and capacity expansions in major regions [7][26] - The strategy includes enhancing operational efficiencies and improving process controls to sustain margin improvements [49] - The company aims to strengthen its balance sheet further, targeting a net debt to EBITDA ratio of 1.1 by year-end [32][81] Management's Comments on Operating Environment and Future Outlook - Management noted uncertainty in air travel growth due to tariffs and economic conditions, but highlighted resilience in customer demand and strong backlogs [22][24] - The outlook for commercial aerospace remains positive, with expectations for increased build rates and strong spares demand [29][30] - The company anticipates a potential step down in commercial truck builds due to economic uncertainties, impacting overall revenue guidance [27][30] Other Important Information - The company achieved a 21.7% reduction in greenhouse gas emissions compared to the 2019 baseline, meeting its three-year target [20] - Fitch upgraded the company's credit rating from BBB to BBB+, reflecting improved financial leverage and strong cash generation [12] Q&A Session Summary Question: Impact of air traffic growth on structures and fasteners - Management emphasized that overall demand for travel is important for future investment and volume assumptions, but noted strong backlogs in aircraft manufacturing [35] Question: Progress on upgraded turbine airfoils and certification timing - Production is on track, with certification for LEAP-1B expected by the end of the calendar year [42] Question: Margin improvements in fastening systems and engineered structures - Improvements are attributed to enhanced process control and operational efficiencies, with expectations for sustainability [46][49] Question: Update on production rates for Boeing 737 and widebody aircraft - Production rates for narrow-body aircraft have increased, while widebody production has faced delays [56][58] Question: Tariff impacts and mitigation strategies - The gross impact of tariffs is estimated at $80 million, with a net impact of less than $15 million after mitigation efforts [88][90]

First Quarter 2025 Earnings Call John Plant: Executive Chairman and Chief Executive Officer Ken Giacobbe: EVP and Chief Financial Officer May 1, 2025 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", "could", " ...

Core Viewpoint - Howmet (HWM) reported quarterly earnings of $0.86 per share, exceeding the Zacks Consensus Estimate of $0.77 per share, and showing an increase from $0.57 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was 11.69%, with the company having surpassed consensus EPS estimates in all four of the last quarters [2] - Howmet's revenues for the quarter reached $1.94 billion, surpassing the Zacks Consensus Estimate by 0.47%, and up from $1.82 billion year-over-year [3] - The company has also exceeded consensus revenue estimates three times in the last four quarters [3] Stock Performance - Howmet shares have increased approximately 26.7% since the beginning of the year, contrasting with a decline of -5.3% in the S&P 500 [4] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [4] Future Outlook - Current consensus EPS estimate for the upcoming quarter is $0.80 on revenues of $1.99 billion, and for the current fiscal year, it is $3.25 on revenues of $8.02 billion [8] - The estimate revisions trend for Howmet is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7] Industry Context - The Aerospace - Defense industry, to which Howmet belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges ahead [9] - The performance of Howmet's stock may be influenced by the overall outlook for the industry [9]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Howmet Aerospace reported record first quarter 2025 results, exceeding guidance with strong growth, strategic capital deployment, and an upgraded credit rating [First Quarter 2025 Performance Overview](index=1&type=section&id=First%20Quarter%202025%20Performance%20Overview) Howmet Aerospace reported record first quarter 2025 results, exceeding baseline guidance with significant year-over-year growth in revenue, profit, and adjusted metrics, primarily driven by strong performance in the commercial aerospace market Q1 2025 Performance Overview | Metric | Q1 2025 (GAAP) | Q1 2024 (GAAP) | YoY Change | Q1 2025 (Adj. Excl. Special Items) | Q1 2024 (Adj. Excl. Special Items) | YoY Change | | :-------------------------------- | :------------- | :------------- | :--------- | :--------------------------------- | :--------------------------------- | :--------- | | Revenue | $1.94B | $1.824B | +6% | - | - | - | | Operating Income | $494M | $369M | +34% | $491M | $369M | +33% | | Operating Income Margin | 25.4% | 20.2% | +520 bps | 25.3% | 20.3% | +500 bps | | Net Income | $344M | $243M | +42% | $351M | $238M | +47% | | Earnings per Share (Diluted) | $0.84 | $0.59 | +42% | $0.86 | $0.57 | +51% | | Adjusted EBITDA | - | - | - | $560M | $437M | +28% | | Adjusted EBITDA Margin | - | - | - | 28.8% | 24.0% | +480 bps | | Cash from Operations | $253M | $177M | +43% | - | - | - | | Free Cash Flow | $134M | $95M | +41% | - | - | - | - Record first quarter 2025 revenue of **$1.94 billion**, up **6% year over year**, primarily driven by **9% growth in the commercial aerospace market**[4](index=4&type=chunk) - Adjusted EBITDA excluding special items reached a record **$560 million**, up **28% year over year**, with margin increasing by **480 basis points to 28.8%**[7](index=7&type=chunk)[8](index=8&type=chunk) [Key Corporate Actions & Outlook](index=2&type=section&id=Key%20Corporate%20Actions%20%26%20Outlook) The company deployed significant capital through share repurchases and increased dividends, while receiving a credit rating upgrade. The outlook remains positive for commercial and defense aerospace, with some uncertainty in commercial transportation due to tariffs - Repurchased **$125 million** of common stock in Q1 2025 and an additional **$100 million** in April 2025[3](index=3&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) - Paid a quarterly common stock dividend of **$0.10 per share** in Q1 2025, a **100% increase** from Q1 2024[3](index=3&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) - Fitch Ratings upgraded Howmet Aerospace's Long-Term Issuer Default Rating from **BBB to BBB+** on March 31, 2025, three notches into Investment Grade[8](index=8&type=chunk)[9](index=9&type=chunk) - Commercial aerospace market is poised for continued growth with record backlogs, and healthy growth is expected in defense aerospace and industrial gas turbine markets. Commercial transportation faces uncertainty due to tariffs[10](index=10&type=chunk) [2025 Financial Guidance](index=1&type=section&id=2025%20Financial%20Guidance) Howmet Aerospace updated its full-year 2025 guidance, widening the revenue range and increasing projections for Adjusted EBITDA, Adjusted EPS, and Free Cash Flow, while also providing Q2 2025 guidance 2025 Financial Guidance | Metric | Q2 2025 Low | Q2 2025 Baseline | Q2 2025 High | FY 2025 Low | FY 2025 Baseline | FY 2025 High | | :------------------ | :---------- | :--------------- | :----------- | :---------- | :--------------- | :----------- | | Revenue | $1.980B | $1.990B | $2.000B | $7.880B | $8.030B | $8.180B | | Adj. EBITDA | $555M | $560M | $565M | $2.225B | $2.250B | $2.275B | | Adj. EBITDA Margin | 28.0% | 28.1% | 28.3% | 28.2% | 28.0% | 27.8% | | Adj. Earnings per Share | $0.85 | $0.86 | $0.87 | $3.36 | $3.40 | $3.44 | | Free Cash Flow | - | - | - | $1.100B | $1.150B | $1.200B | - Full Year 2025 Guidance: Revenue range widened, with increases to Adjusted EBITDA, Adjusted EPS, and Free Cash Flow, including current assumptions of tariff impacts[2](index=2&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) [First Quarter 2025 Financial Results](index=2&type=section&id=First%20Quarter%202025%20Financial%20Results) This section details Howmet Aerospace's consolidated and segment-specific financial performance for Q1 2025, driven by strong aerospace market growth [Consolidated Financial Performance (GAAP & Adjusted)](index=2&type=section&id=Consolidated%20Financial%20Performance%20%28GAAP%20%26%20Adjusted%29) Howmet Aerospace achieved record consolidated financial performance in Q1 2025, with significant year-over-year increases across key GAAP and adjusted metrics, driven by strong market growth and operational efficiency Q1 2025 Consolidated Financial Performance | Metric | Q1 2025 (GAAP) | Q1 2024 (GAAP) | YoY Change | Q1 2025 (Adj. Excl. Special Items) | Q1 2024 (Adj. Excl. Special Items) | YoY Change | | :-------------------------------- | :------------- | :------------- | :--------- | :--------------------------------- | :--------------------------------- | :--------- | | Revenue | $1.94B | $1.824B | +6% | - | - | - | | Operating Income | $494M | $369M | +34% | $491M | $369M | +33% | | Operating Income Margin | 25.4% | 20.2% | +520 bps | 25.3% | 20.3% | +500 bps | | Net Income | $344M | $243M | +42% | $351M | $238M | +47% | | Earnings per Share (Diluted) | $0.84 | $0.59 | +42% | $0.86 | $0.57 | +51% | | Adjusted EBITDA | - | - | - | $560M | $437M | +28% | | Adjusted EBITDA Margin | - | - | - | 28.8% | 24.0% | +480 bps | - Operating Income Margin increased by approximately **520 basis points year over year to 25.4%**, with Adjusted Operating Income Margin up **500 basis points to 25.3%**[6](index=6&type=chunk) - Adjusted EBITDA growth was driven by strong performance in commercial and defense aerospace markets, partially offset by declines in commercial transportation[7](index=7&type=chunk) [Segment Performance](index=3&type=section&id=Segment%20Performance) Segment performance in Q1 2025 showed strong growth in Engine Products, Fastening Systems, and Engineered Structures, primarily driven by aerospace markets, while Forged Wheels experienced a decline due to lower commercial transportation volumes [Engine Products](index=3&type=section&id=Engine%20Products) The Engine Products segment experienced significant growth in sales and Adjusted EBITDA, driven by strong demand across commercial and defense aerospace, industrial gas turbine, and oil and gas markets Engine Products Q1 2025 Performance | Metric | 1Q24 | 1Q25 | YoY Change | | :-------------------------- | :--- | :--- | :--------- | | Third-party sales | $885M | $996M | +13% | | Segment Adjusted EBITDA | $249M | $325M | +31% | | Segment Adjusted EBITDA Margin | 28.1% | 32.6% | +450 bps | | Capital expenditures | $55M | $86M | +56% | - Growth driven by commercial aerospace, defense aerospace, industrial gas turbine, and oil and gas markets. The segment absorbed approximately **500 net headcount** in support of expected revenue increases[11](index=11&type=chunk) [Fastening Systems](index=3&type=section&id=Fastening%20Systems) The Fastening Systems segment reported increased revenue and Adjusted EBITDA, primarily due to growth in the commercial aerospace market and productivity gains, despite some offset from commercial transportation declines Fastening Systems Q1 2025 Performance | Metric | 1Q24 | 1Q25 | YoY Change | | :-------------------------- | :--- | :--- | :--------- | | Third-party sales | $389M | $412M | +6% | | Segment Adjusted EBITDA | $92M | $127M | +38% | | Segment Adjusted EBITDA Margin | 23.7% | 30.8% | +710 bps | | Capital expenditures | $7M | $10M | +43% | - Revenue and EBITDA growth driven by the commercial aerospace market and productivity gains, partially offset by declines in the commercial transportation market[13](index=13&type=chunk) [Engineered Structures](index=4&type=section&id=Engineered%20Structures) The Engineered Structures segment achieved notable revenue and Adjusted EBITDA growth, primarily propelled by strong performance in the defense aerospace market and operational productivity improvements Engineered Structures Q1 2025 Performance | Metric | 1Q24 | 1Q25 | YoY Change | | :-------------------------- | :--- | :--- | :--------- | | Third-party sales | $262M | $282M | +8% | | Segment Adjusted EBITDA | $37M | $60M | +62% | | Segment Adjusted EBITDA Margin | 14.1% | 21.3% | +720 bps | | Capital expenditures | $6M | $5M | -17% | - Revenue and EBITDA growth driven by the defense aerospace market and productivity gains[14](index=14&type=chunk) [Forged Wheels](index=4&type=section&id=Forged%20Wheels) The Forged Wheels segment experienced a decline in revenue and Adjusted EBITDA due to lower volumes in the commercial transportation market, partially mitigated by cost pass-throughs Forged Wheels Q1 2025 Performance | Metric | 1Q24 | 1Q25 | YoY Change | | :-------------------------- | :--- | :--- | :--------- | | Third-party sales | $288M | $252M | -13% | | Segment Adjusted EBITDA | $82M | $68M | -17% | | Segment Adjusted EBITDA Margin | 28.5% | 27.0% | -150 bps | | Capital expenditures | $12M | $15M | +25% | - Revenue and EBITDA decreased due to lower volumes in the commercial transportation market, partially offset by aluminum and other inflationary cost pass-through[15](index=15&type=chunk) [Corporate & Financial Updates](index=4&type=section&id=Corporate%20%26%20Financial%20Updates) This section outlines Howmet Aerospace's strategic financial activities, including share repurchases, dividend increases, and a significant credit rating upgrade [Share Repurchase Program](index=4&type=section&id=Share%20Repurchase%20Program) Howmet Aerospace actively repurchased common stock in Q1 2025 and April 2025, demonstrating a commitment to returning capital to shareholders and reducing share count - Repurchased **$125 million** of common stock in Q1 2025 at an average price of **$124.24 per share**, retiring approximately **1.0 million shares**[3](index=3&type=chunk)[9](index=9&type=chunk)[16](index=16&type=chunk) - Repurchased an additional **$100 million** of common stock in April 2025 at an average price of **$125.61 per share**, retiring approximately **0.8 million shares**[8](index=8&type=chunk)[9](index=9&type=chunk)[16](index=16&type=chunk) - As of April 30, 2025, total share repurchase authorization available was **$1.972 billion**[16](index=16&type=chunk) [Common Stock Dividend](index=4&type=section&id=Common%20Stock%20Dividend) The company significantly increased its quarterly common stock dividend, reflecting strong financial performance and a commitment to shareholder returns - Paid a quarterly dividend of **$0.10 per share** on common stock in Q1 2025, a **100% increase** from the **$0.05 per share** dividend paid in Q1 2024[3](index=3&type=chunk)[9](index=9&type=chunk)[17](index=17&type=chunk) - The Board of Directors announced a quarterly dividend of **$0.10 per share** to be paid on May 27, 2025[17](index=17&type=chunk) [Credit Rating Upgrade](index=5&type=section&id=Credit%20Rating%20Upgrade) Fitch Ratings upgraded Howmet Aerospace's long-term credit rating, recognizing the company's strengthening balance sheet and financial stability - On March 31, 2025, Fitch Ratings upgraded Howmet Aerospace's Long-Term Issuer Default Rating from **BBB to BBB+**, placing it three notches into Investment Grade[8](index=8&type=chunk)[9](index=9&type=chunk)[18](index=18&type=chunk) [Company Information & Disclaimers](index=5&type=section&id=Company%20Information%20%26%20Disclaimers) This section provides an overview of Howmet Aerospace's business, along with standard disclaimers regarding forward-looking statements and non-GAAP financial measures [About Howmet Aerospace](index=5&type=section&id=About%20Howmet%20Aerospace) Howmet Aerospace is a global leader in advanced engineered solutions for the aerospace and transportation industries, focusing on critical components for jet engines, aerospace fastening systems, airframe structures, and forged aluminum wheels - Headquartered in Pittsburgh, Pennsylvania, Howmet Aerospace provides advanced engineered solutions for aerospace and transportation[21](index=21&type=chunk) - Primary businesses include jet engine components, aerospace fastening systems, airframe structural components, and forged aluminum wheels for commercial transportation[21](index=21&type=chunk) - The company holds approximately **1,170 granted and pending patents**, enabling lighter, more fuel-efficient aircraft and commercial trucks[21](index=21&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section contains standard forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from projections, including economic conditions, market changes, supply chain disruptions, and geopolitical risks - Statements relate to future events and expectations, constituting forward-looking statements under the Private Securities Litigation Reform Act of 1995[23](index=23&type=chunk) - Subject to risks and uncertainties such as global economic deterioration, cyber attacks, loss of significant customers, manufacturing difficulties, supply chain disruptions, workforce issues, competition, geopolitical risks, and legal contingencies[23](index=23&type=chunk) - The company disclaims any obligation to publicly update forward-looking statements, except as required by applicable law[23](index=23&type=chunk) [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) The report includes non-GAAP financial measures to supplement GAAP disclosures, providing additional insights into operating performance and financial obligations, with reconciliations provided in the schedules - Certain data are considered 'non-GAAP financial measures' under SEC rules, supplementing GAAP disclosures and not considered an alternative to GAAP measures[24](index=24&type=chunk) - Reconciliations to the most directly comparable GAAP financial measures and management's rationale for their use are provided in the schedules[24](index=24&type=chunk) [Unaudited Financial Statements](index=8&type=section&id=Unaudited%20Financial%20Statements) This section presents Howmet Aerospace's unaudited consolidated financial statements for Q1 2025, including the Statement of Operations, Balance Sheet, and Cash Flows [Statement of Consolidated Operations](index=8&type=section&id=Statement%20of%20Consolidated%20Operations) The unaudited Statement of Consolidated Operations details Howmet Aerospace's financial performance for the first quarter ended March 31, 2025, showing significant increases in sales, operating income, and net income compared to prior periods Statement of Consolidated Operations (Q1 2025 vs. Q1 2024) | Metric | Q1 2025 | Q1 2024 | | :------------------------------------ | :------ | :------ | | Sales | $1,942M | $1,824M | | Operating income | $494M | $369M | | Net income | $344M | $243M | | Earnings per share - diluted | $0.84 | $0.59 | [Consolidated Balance Sheet](index=9&type=section&id=Consolidated%20Balance%20Sheet) The unaudited Consolidated Balance Sheet as of March 31, 2025, shows the company's financial position, with an increase in total assets and total equity compared to December 31, 2024 Consolidated Balance Sheet (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total current assets | $3,554M | $3,362M | | Total assets | $10,772M | $10,519M | | Total current liabilities | $1,548M | $1,549M | | Total liabilities | $5,980M | $5,965M | | Total equity | $4,792M | $4,554M | [Statement of Consolidated Cash Flows](index=10&type=section&id=Statement%20of%20Consolidated%20Cash%20Flows) The unaudited Statement of Consolidated Cash Flows for Q1 2025 indicates strong cash generation from operations, which was partially used for financing and investing activities, resulting in a net decrease in cash and cash equivalents Statement of Consolidated Cash Flows (Q1 2025 vs. Q1 2024) | Activity | Q1 2025 | Q1 2024 | | :------------------------------------ | :------ | :------ | | Cash provided from operations | $253M | $177M | | Cash used for financing activities | $(167)M | $(178)M | | Cash used for investing activities | $(115)M | $(75)M | | Net change in cash, cash equivalents and restricted cash | $(28)M | $(76)M | | Cash, cash equivalents and restricted cash at end of period | $537M | $534M | [Reconciliation of Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of various non-GAAP financial measures to their most directly comparable GAAP counterparts [Total Segment Adjusted EBITDA Reconciliation](index=11&type=section&id=Total%20Segment%20Adjusted%20EBITDA%20Reconciliation) This section provides the reconciliation of Total Segment Adjusted EBITDA to Consolidated Income Before Income Taxes, highlighting the adjustments made for depreciation, amortization, restructuring, and corporate expenses to present a non-GAAP measure of operating performance Total Segment Adjusted EBITDA Reconciliation (Q1 2025 vs. Q1 2024) | Metric | 1Q25 | 1Q24 | | :------------------------------------ | :----- | :----- | | Income before income taxes | $446M | $303M | | Operating income | $494M | $369M | | Segment provision for depreciation and amortization | $68M | $65M | | Restructuring and other charges (credits) | $(4)M | $0M | | Corporate expense | $22M | $26M | | Total Segment Adjusted EBITDA | $580M | $460M | - Total Segment Adjusted EBITDA is a non-GAAP measure used by management to assess operating performance and ability to meet financial obligations, excluding special items[32](index=32&type=chunk) [Free Cash Flow Reconciliation](index=13&type=section&id=Free%20Cash%20Flow%20Reconciliation) This reconciliation details the calculation of Free Cash Flow, a non-GAAP measure, by subtracting capital expenditures from cash provided by operations, indicating the cash available after maintaining and expanding the asset base Free Cash Flow Reconciliation (Q1 2025 vs. Q1 2024) | Metric | 1Q25 | 1Q24 | | :-------------------------- | :----- | :----- | | Cash provided from operations | $253M | $177M | | Capital expenditures | $(119)M | $(82)M | | Free cash flow | $134M | $95M | - Free cash flow increased by **$39 million year-over-year**, from **$95 million in Q1 2024 to $134 million in Q1 2025**[34](index=34&type=chunk) - Free cash flow does not represent residual cash flow for discretionary expenditures as mandatory debt service is not deducted[35](index=35&type=chunk) [Net Income and EPS Excluding Special Items Reconciliation](index=14&type=section&id=Net%20Income%20and%20EPS%20Excluding%20Special%20Items%20Reconciliation) This reconciliation adjusts GAAP Net Income and Diluted EPS by excluding the impact of special items, such as restructuring credits, plant fire reimbursements, and discrete tax items, to provide a clearer view of underlying operating performance Net Income and EPS Excluding Special Items Reconciliation (Q1 2025 vs. Q1 2024) | Metric | 1Q25 | 1Q24 | | :------------------------------------ | :----- | :----- | | Net income | $344M | $243M | | Diluted earnings per share ("EPS") | $0.84 | $0.59 | | Total: After-tax special items | $7M | $(5)M | | Net income excluding Special items | $351M | $238M | | Diluted EPS excluding Special items | $0.86 | $0.57 | - Special items in Q1 2025 included restructuring and other credits (**$(4) million**), costs associated with closures, supply chain disruptions, and other items (**$1 million**), and discrete and other tax special items (**$9 million**)[36](index=36&type=chunk)[37](index=37&type=chunk) [Operational Tax Rate Reconciliation](index=15&type=section&id=Operational%20Tax%20Rate%20Reconciliation) This reconciliation presents the operational tax rate by adjusting the GAAP effective tax rate for the impact of special items, offering a more normalized view of the company's tax burden on its core operations Operational Tax Rate Reconciliation (Q1 2025) | Metric | Effective tax rate, as reported | Special items | Operational tax rate, as adjusted | | :-------------------------- | :------------------------------ | :------------ | :-------------------------------- | | Income before income taxes | $446M | $(3)M | $443M | | Provision for income taxes | $102M | $(10)M | $92M | | Tax rate | 22.9% | - | 20.8% | - Pre-tax special items for Q1 2025 included restructuring and other credits (**$(4) million**), partially offset by costs associated with closures, supply chain disruptions, and other items (**$1 million**)[39](index=39&type=chunk) - Discrete tax items for Q1 2025 included a net charge related to the expiration of a tax holiday in China (**$6 million**), a charge for a tax reserve established in Germany (**$2 million**), and a net charge for other small items (**$1 million**)[40](index=40&type=chunk) [Adjusted EBITDA and Margin Reconciliation](index=16&type=section&id=Adjusted%20EBITDA%20and%20Margin%20Reconciliation) This reconciliation provides Adjusted EBITDA and Adjusted EBITDA margin by adding back income taxes, interest, other expenses, restructuring credits, and depreciation/amortization to net income, and further adjusting for special items, to show core operational profitability Adjusted EBITDA and Margin Reconciliation (Q1 2025 vs. Q1 2024) | Metric | 1Q25 | 1Q24 | | :------------------------------------ | :----- | :----- | | Sales | $1,942M | $1,824M | | Operating income | $494M | $369M | | Adjusted EBITDA | $559M | $436M | | Adjusted EBITDA excluding Special items | $560M | $437M | | Adjusted EBITDA margin excluding Special items | 28.8% | 24.0% | | Incremental operating income margin | 106% | - | | Incremental margin | 104% | - | - Adjusted EBITDA excluding Special items increased by **$123 million year-over-year**, from **$437 million in Q1 2024 to $560 million in Q1 2025**[41](index=41&type=chunk) - The incremental operating income margin was **106%**, and the incremental margin (Adjusted EBITDA excluding Special items) was **104% year-over-year**[41](index=41&type=chunk) [Adjusted Operating Income and Margin Reconciliation](index=17&type=section&id=Adjusted%20Operating%20Income%20and%20Margin%20Reconciliation) This reconciliation adjusts GAAP Operating Income and Operating Income Margin by excluding special items, such as restructuring credits and costs associated with disruptions, to provide a clearer perspective on the company's core operational profitability Adjusted Operating Income and Margin Reconciliation (Q1 2025 vs. Q1 2024) | Metric | 1Q25 | 1Q24 | | :------------------------------------ | :----- | :----- | | Sales | $1,942M | $1,824M | | Operating income | $494M | $369M | | Operating income margin | 25.4% | 20.2% | | Adjusted operating income excluding Special items | $491M | $370M | | Adjusted operating income margin excluding Special items | 25.3% | 20.3% | - Adjusted operating income excluding Special items increased by **$121 million year-over-year**, from **$370 million in Q1 2024 to $491 million in Q1 2025**[42](index=42&type=chunk) - Adjusted operating income margin excluding Special items improved by **500 basis points year-over-year**, reaching **25.3% in Q1 2025**[42](index=42&type=chunk)

Analysts on Wall Street project that Howmet (HWM) will announce quarterly earnings of $0.77 per share in its forthcoming report, representing an increase of 35.1% year over year. Revenues are projected to reach $1.93 billion, increasing 6% from the same quarter last year. Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 0.5% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this period. Ah ...

Core Viewpoint - Howmet Aerospace Inc. is set to release its first-quarter 2025 results, with earnings expected to show a significant year-over-year increase, despite facing challenges in the commercial transportation market and supply chain disruptions [1][4][5]. Financial Performance - The Zacks Consensus Estimate for earnings is 77 cents per share, reflecting a 35.1% increase from the previous year, while revenues are projected at $1.93 billion, indicating a 6% year-over-year growth [1]. - Earnings estimates have remained stable over the past 60 days, with the current quarter's estimate unchanged at 77 cents per share [2]. Earnings Surprise History - Howmet has a strong earnings surprise history, exceeding the Zacks Consensus Estimate in the last four quarters with an average surprise of 8.3% [2]. Market Conditions - The company is experiencing weakness in the commercial transportation market, particularly in the Forged Wheels segment, due to lower OEM builds [4]. - Production issues at Boeing are expected to negatively impact Howmet's sales, particularly in narrow-body and wide-body aircraft [4]. Supply Chain and Cost Challenges - Howmet has faced supply chain disruptions in the aerospace sector, leading to delays and increased costs, which are likely to affect its performance [5]. - High operating costs, labor shortages, and increased raw material costs are anticipated to hurt the company's bottom line in the upcoming quarter [6]. Positive Market Trends - Despite challenges, Howmet is witnessing strong demand in the commercial aerospace market, driven by increased air travel and OEM spending [7]. - The recovery of the Boeing 737 MAX production is expected to positively influence demand for Howmet's products [8]. - The defense business is also performing well, with robust orders for engine spares for the F-35 program contributing to top-line growth [8]. Stock Performance - Howmet's shares have increased by 9.4% over the past three months, outperforming the Zacks Aerospace - Defense industry, which declined by 4.3% [9]. Valuation Concerns - The company is trading at a forward P/E ratio of 38.62X, significantly higher than the industry average of 23.42X, which may pose risks if market sentiment declines [11]. Long-term Outlook - Howmet's diversified portfolio and strength in the commercial aerospace market suggest promising long-term growth potential [14].

Core Viewpoint - The article highlights the strong performance of Howmet Aerospace Inc. (NYSE: HWM.PR) with a reported return of 11.2% and a total return of 12.6% since the last analysis, indicating a positive investment opportunity in the aerospace sector [1]. Group 1: Company Performance - Howmet Aerospace Inc. has shown a strong buy rating, which has resulted in significant returns for investors [1]. - The company is part of a broader analysis focused on the aerospace, defense, and airline industries, which are expected to have substantial growth prospects [1]. Group 2: Analyst Insights - The analysis is conducted by an experienced analyst with a background in aerospace engineering, providing informed insights into the complexities of the industry [1]. - The investing group offers access to data analytics monitors, enhancing the investment decision-making process [1].