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Howmet Aerospace Inc (HWM) Q4 2024 Earnings Call Highlights: Record Revenue and EPS Growth Amid ...

In This Article:

  • Revenue: Up 9% in Q4 and 12% for the full year 2024.

  • Earnings Per Share (EPS): $0.74 in Q4, a 40% increase year-over-year; $2.69 for the full year, a 46% increase year-over-year.

  • Operating Margin: 23% for Q4.

  • Free Cash Flow: Record $977 million for the year, representing an 88% conversion of net income.

  • Share Repurchases: $500 million in 2024, with $190 million in Q4.

  • Debt Reduction: $365 million in 2024.

  • Dividends Paid: $109 million in 2024, with a recent 25% increase in the quarterly dividend.

  • Net Debt-to-EBITDA Ratio: Improved to 1.4 times.

  • Commercial Aerospace Revenue: Up 13% in Q4 and 20% for the full year.

  • Defense Aerospace Revenue: Up 22% in Q4 and 15% for the full year.

  • Commercial Transportation Revenue: Down 12% in Q4 and 7% for the full year.

  • Industrial and Other Markets Revenue: Up 11% in Q4 and 9% for the full year.

  • Spares Revenue: $1.28 billion for the full year, representing 17% of total revenue.

  • EBITDA Margin: Increased 310 basis points to 25.8% for the full year.

  • CapEx Investments: $321 million for the year, up approximately $100 million year-over-year.

  • Cash Balance: $565 million at year-end.

  • Engine Products Revenue: Up 14% in Q4 and 14% for the full year.

  • Fastening Systems Revenue: Up 11% in Q4 and 17% for the full year.

  • Engineered Structures Revenue: Up 13% in Q4 and 21% for the full year.

  • Forged Wheels Revenue: Down 12% in Q4 and 8% for the full year.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Howmet Aerospace Inc (NYSE:HWM) reported record revenues, EBITDA, EBITDA margin, and earnings per share for the fourth quarter and full year 2024.

  • The company achieved a 46% year-over-year increase in earnings per share, surpassing initial guidance by 25%.

  • Free cash flow for the year was a record $977 million, with an 88% conversion of net income.

  • Howmet Aerospace Inc (NYSE:HWM) repurchased $500 million of common stock and reduced debt by $365 million in 2024.

  • The company announced a 25% increase in the quarterly common stock dividend, reflecting confidence in future cash flow generation.

Negative Points

  • Commercial transportation revenues were down 12% in the fourth quarter and 7% for the full year, indicating challenges in this segment.

  • The company anticipates a back-end loaded profit in 2025, with potential uncertainties in narrow-body aircraft builds.

  • There is a cautious outlook for the commercial truck market, with muted demand expected to continue into the first half of 2025.

  • Howmet Aerospace Inc (NYSE:HWM) faces potential headwinds from tariffs, although they plan to pass additional costs to customers.

  • The company expects to add approximately 1,000 net new employees in 2025, which could impact operating leverage and margins.