Howmet Aerospace(HWM) - 2025 Q1 - Quarterly Report

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$177 million in the first quarter of 2024 [131]. Segment Performance - Engine Products segment third-party sales increased by $111 million or 13$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$412 million, driven by growth in the commercial aerospace market [114]. - Engineered Structures segment third-party sales increased by $20 million or 8$282 million, mainly due to growth in the defense aerospace market [118]. - Forged Wheels segment third-party sales decreased by $36 million or 13$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$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$39 million, due to early redemptions of debt [100]. - Corporate expenses decreased by $4 million, or 15$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].