Howmet Aerospace(HWM) - 2025 Q3 - Quarterly Results

Financial Performance - Record revenue of $2.09 billion in Q3 2025, up 14% year over year, driven by a 15% increase in commercial aerospace[8] - Net income of $385 million, or $0.95 per share, compared to $332 million, or $0.81 per share, in Q3 2024[9] - Adjusted EBITDA of $614 million, up 26% year over year, with an adjusted EBITDA margin of 29.4%, an increase of 290 basis points[11] - Net income for Q3 2025 was $385 million, compared to $407 million in Q2 2025 and $332 million in Q3 2024[32] - Sales for Q3 2025 reached $2,089 million, an increase from $2,053 million in Q2 2025 and $1,835 million in Q3 2024[32] - Total Segment Adjusted EBITDA for 3Q24 was $488 million, increasing to $614 million by 3Q25, reflecting a growth in Adjusted EBITDA margin from 26.5% to 29.4%[49] - Net income for 3Q24 was $332 million, which rose to $385 million in 3Q25, with diluted earnings per share increasing from $0.81 to $0.95 during the same period[45] Guidance and Projections - Full Year 2026 revenue guidance raised to approximately $9 billion, representing a ~10% increase year over year[13] - Q4 2025 revenue guidance ranges from $2.090 billion to $2.110 billion, with FY 2025 guidance between ~$8.175 billion and ~$8.195 billion[24] - Adjusted EBITDA for Q4 2025 is guided between $605 million and $615 million, with an adjusted EBITDA margin of approximately 29.0%[24] - Adjusted earnings per share for Q4 2025 is projected to be between $0.94 and $0.96, with FY 2025 adjusted EPS guidance between $3.66 and $3.68[24] Cash Flow and Capital Management - Cash from operations generated $531 million, with free cash flow of $423 million after $108 million in capital expenditures[12] - The company paid down the remaining $63 million of its USD Term Loan in Q3 2025, resulting in annualized interest expense savings of approximately $4 million[22] - Cash provided from operations for the nine months ended September 30, 2025, was $1,230 million, up from $818 million in 2024, representing a 50.5% increase[36] - Free cash flow for the nine months ended September 30, 2025, was $901 million, compared to $423 million in the same period of 2024, indicating a 112% increase[37] - The company repurchased $500 million of common stock during the nine months ended September 30, 2025, compared to $310 million in the same period of 2024[36] Segment Performance - Engine Products segment revenue of $1.1 billion, up 17% year over year, with adjusted EBITDA of $368 million, up 20%[15] - Fastening Systems segment revenue of $448 million, up 14% year over year, with adjusted EBITDA of $138 million, up 35%[17] - Engineered Structures segment revenue of $289 million, up 14% year over year, with adjusted EBITDA of $58 million, up 53%[18] - Total third-party sales in Engine Products segment for Q3 2025 reached $1,105 million, a 16% increase from $945 million in Q3 2024[40] - Segment Adjusted EBITDA margin for Engine Products in Q3 2025 was 33.3%, up from 32.5% in Q3 2024[40] Balance Sheet and Equity - Total assets as of September 30, 2025, were $11,177 million, up from $10,519 million at the end of 2024[35] - Total equity increased to $5,143 million as of September 30, 2025, compared to $4,554 million at the end of 2024[35] - Cash, cash equivalents, and restricted cash at the end of the period were $660 million, up from $475 million at the end of the same period in 2024[36] Stockholder Returns - $200 million of common stock repurchased in Q3 2025 at an average price of $182.20 per share, with an additional $100 million repurchased in October 2025[20] - The quarterly common stock dividend increased by 20% to $0.12 per share in Q3 2025, up from $0.10 per share in Q2 2025[21] Credit Rating and Tax Efficiency - S&P upgraded Howmet Aerospace's long-term issuer credit rating from BBB to BBB+ on September 8, 2025[23] - The operational tax rate for 3Q25 was reported at 21.3%, compared to 22.2% in the previous quarter, reflecting improved tax efficiency[47]