Howmet's Q1 Earnings & Revenues Surpass Estimates, Increase Y/Y

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]