Howmet Aerospace(HWM) - 2024 Q4 - Annual Results

Revenue and Growth - FY 2024 revenue reached $7.4 billion, up 12% year over year, driven by a 20% increase in the commercial aerospace market[13] - Q4 2024 revenue was $1.9 billion, a 9% increase year over year, primarily due to a 13% growth in the commercial aerospace sector[7] - FY 2025 revenue growth guidance has been raised to approximately 8% year over year[17] - Sales for 2024 increased to $7,430 million, up 11.9% from $6,640 million in 2023[47] - Q4 2023 sales reached $1,731 million, with a projected increase to $1,891 million in Q4 2024, representing a growth of 9.7%[69] - The company anticipates a total sales increase from $6,640 million in 2023 to $7,430 million in 2024, reflecting a growth of 11.9%[69] Net Income and Earnings - Net income for FY 2024 was $1.2 billion, or $2.81 per share, compared to $765 million, or $1.83 per share, in FY 2023[14] - Net income rose to $1,155 million in 2024, a 51.0% increase compared to $765 million in 2023[47] - Basic earnings per share (EPS) increased to $2.83 in 2024, up 53.0% from $1.85 in 2023[47] - Net income for Q4 2024 is expected to reach $314 million, with a total of $1,155 million for the year[56] - Total net income excluding special items for the year ended December 31, 2023, was $766 million, with a diluted EPS of $1.84[60] Cash Flow and Capital Management - Free cash flow for FY 2024 was $977 million, representing an 88% conversion of net income[17] - The company repurchased $190 million of common stock in Q4 2024, totaling $500 million for the full year 2024, retiring approximately 5.8 million shares[28] - The company repurchased $500 million of common stock in 2024, up from $250 million in 2023[51] - Free cash flow for Q4 2024 is projected to be $378 million, contributing to a total of $977 million for the year[56] - Free cash flow conversion as a percentage of net income for 2024 is projected at 85%[56] Segment Performance - Engine Products segment revenue for FY 2024 was $3.7 billion, up 14% year over year, with an adjusted EBITDA margin of 30.8%[20] - Fastening Systems segment revenue for FY 2024 was $1.6 billion, up 17% year over year, with an adjusted EBITDA margin of 25.8%[22] - Forged Wheels reported Q4 2024 revenue of $243 million, a 12% decrease year over year due to lower volumes in the commercial transportation market[25] - Full year 2024 revenue was $1.1 billion, down 8% year over year, attributed to lower volumes and inflationary cost pressures[27] - Total Segment Adjusted EBITDA for 2023 was $1,587 million, with a projected increase to $2,009 million in 2024[54] Expenses and Investments - Adjusted EBITDA for FY 2024 was $1.9 billion, up 27% year over year, with an adjusted EBITDA margin of 25.8%[16] - Capital expenditures for 2024 were $321 million, compared to $219 million in 2023, indicating a 46.5% increase[51] - Research and development expenses slightly decreased to $33 million in 2024 from $36 million in 2023[47] Debt and Financial Obligations - In 2024, the company reduced gross debt by $365 million, resulting in annualized interest expense savings of approximately $37 million[32] - Long-term debt decreased to $3,309 million in 2024 from $3,500 million in 2023, a reduction of 5.5%[50] Dividends and Shareholder Returns - The quarterly dividend was increased by 25% to $0.10 per share starting Q1 2025[12] - The quarterly common stock dividend was increased by 25% to $0.10 per share for Q1 2025, following a dividend of $0.08 per share in Q4 2024[33] Future Outlook and Guidance - Q1 2025 guidance for revenue ranges from $1.925 billion to $1.945 billion, with Adjusted EBITDA guidance between $515 million and $525 million[35] - The company plans to hold its quarterly conference call on February 13, 2025, to discuss financial performance and future outlook[36] - The company anticipates continued growth in sales and operating income, driven by market expansion and new product developments[68] Operational Performance - The operating income margin improved from 18.8% in Q4 2023 to 23.5% in Q4 2024[68] - Adjusted operating income margin excluding special items improved from 19.1% in Q4 2023 to 23.0% in Q4 2024[69] - The overall operating income margin is expected to improve from 18.1% in the year ended December 2023 to 22.0% in the year ended December 2024[69] Special Items and Adjustments - Pre-tax special items for YTD 2023 included restructuring charges of $23 million and costs associated with closures of $13 million[66] - The company reported a net benefit of $44 million related to additional U.S. federal and state R&D credits claimed for prior years in YTD 2024[67] - Future periods may still incur additional special items, but management believes it is appropriate to consider both GAAP and non-GAAP measures[69]