Howmet Aerospace Inc. (HWM) Bundle
A Brief History of Howmet Aerospace
Company Overview
Howmet Aerospace Inc., a leading provider of advanced engineered solutions for the aerospace and transportation industries, has a history of innovation and strategic growth. As of 2024, the company operates in four primary segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels.
Financial Performance
For the third quarter of 2024, Howmet reported a net income of $332 million, or $0.81 per diluted share, compared to $188 million, or $0.45 per diluted share, in the same quarter of 2023. For the nine months ended September 30, 2024, net income was $841 million, or $2.04 per diluted share, up from $529 million, or $1.27 per diluted share, for the same period in 2023.
Sales Breakdown
Sales for the third quarter of 2024 totaled $1,835 million, an increase from $1,658 million in the third quarter of 2023. For the nine months ended September 30, 2024, total sales reached $5,539 million, compared to $4,909 million in the same period of 2023.
| Segment | Q3 2024 Sales ($M) | Q3 2023 Sales ($M) | 9M 2024 Sales ($M) | 9M 2023 Sales ($M) |
|---|---|---|---|---|
| Engine Products | $945 | $798 | $2,763 | $2,414 |
| Fastening Systems | $392 | $348 | $1,175 | $989 |
| Engineered Structures | $253 | $227 | $790 | $634 |
| Forged Wheels | $245 | $285 | $811 | $872 |
Segment Performance
The Engine Products segment saw a significant increase in sales, driven by growth in the commercial aerospace and defense markets. Segment Adjusted EBITDA for Engine Products reached $307 million in Q3 2024, compared to $219 million in Q3 2023.
Fastening Systems also experienced robust growth, with Q3 2024 sales of $392 million, reflecting a 13% increase from Q3 2023. Segment Adjusted EBITDA rose to $102 million.
Engineered Structures reported a 11% increase in sales for Q3 2024, totaling $253 million, with Adjusted EBITDA improving to $38 million.
Conversely, the Forged Wheels segment faced challenges, with a decrease in sales to $245 million in Q3 2024, down from $285 million in Q3 2023.
Capital Expenditures and Share Repurchases
Howmet's capital expenditures for the nine months ended September 30, 2024, totaled $219 million, compared to $164 million in 2023. The company repurchased a total of 4,039,319 shares at an average price of $76.75 per share as of September 30, 2024.
Debt Management
As of September 30, 2024, Howmet's long-term debt stood at $3,393 million, reduced from $3,500 million in the previous year. The company has engaged in various debt redemptions and repurchases, effectively managing its interest expenses.
Outlook and Future Plans
In 2024, Howmet anticipates continued demand growth in the commercial aerospace and industrial markets, despite facing challenges related to production rates at Boeing due to quality control issues and labor union work stoppages. The company also completed the acquisition of Camcraft LTD in October 2024, enhancing its Engine Products segment.
A Who Owns Howmet Aerospace Inc. (HWM)
Shareholder Composition
As of 2024, Howmet Aerospace Inc. (HWM) has a diverse shareholder base comprising institutional investors, mutual funds, and individual shareholders. The following table summarizes the major shareholders:
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 76.2% | 310,000,000 |
| Mutual Funds | 14.5% | 58,000,000 |
| Individual Investors | 9.3% | 37,000,000 |
Top Institutional Investors
The following table lists the top institutional investors holding shares in Howmet Aerospace Inc.:
| Institution | Percentage of Total Shares | Number of Shares |
|---|---|---|
| Vanguard Group, Inc. | 8.9% | 36,000,000 |
| BlackRock, Inc. | 7.5% | 30,000,000 |
| State Street Corporation | 5.6% | 22,000,000 |
| Fidelity Investments | 4.3% | 17,000,000 |
| Invesco Ltd. | 3.2% | 13,000,000 |
Shareholder Equity and Stock Performance
As of September 30, 2024, Howmet Aerospace reported the following equity data:
| Equity Component | Value (in millions) |
|---|---|
| Preferred Stock | $55 |
| Common Stock | $407 |
| Additional Capital | $3,386 |
| Retained Earnings | $2,453 |
| Accumulated Other Comprehensive Loss | ($1,798) |
| Total Equity | $4,503 |
Recent Stock Activity
Howmet Aerospace has engaged in stock repurchase activities as part of its capital management strategy. The following table outlines recent share repurchase activity:
| Quarter | Number of Shares Repurchased | Average Price per Share | Total Cost (in millions) |
|---|---|---|---|
| Q1 2024 | 2,243,259 | $66.87 | $150 |
| Q2 2024 | 734,737 | $81.66 | $60 |
| Q3 2024 | 1,061,323 | $94.22 | $100 |
| Total 2024 (as of September 30) | 4,039,319 | $76.75 | $310 |
Dividends and Earnings
Howmet Aerospace has declared dividends as follows:
| Dividend Type | Amount per Share | Declared Date |
|---|---|---|
| Preferred-Class A | $0.9375 | August 2024 |
| Common Stock | $0.16 | August 2024 |
For the third quarter of 2024, Howmet Aerospace reported:
| Performance Metric | Value |
|---|---|
| Net Income (in millions) | $332 |
| Earnings per Share (EPS) | $0.81 |
| Average Shares Outstanding (Basic) | 408 million |
Common stock outstanding as of September 30, 2024, was 407,129,690 shares.
Howmet Aerospace Inc. (HWM) Mission Statement
The mission statement of Howmet Aerospace Inc. emphasizes its commitment to innovation, sustainability, and operational excellence in the aerospace and transportation industries. The company aims to leverage advanced technologies and materials to deliver high-performance solutions that meet the evolving needs of its customers.
Financial Overview
As of the third quarter of 2024, Howmet Aerospace reported net income of $332 million, or $0.81 per diluted share, compared to $188 million, or $0.45 per diluted share for the same period in 2023. For the nine months ended September 30, 2024, net income reached $841 million, or $2.04 per diluted share, up from $529 million, or $1.27 per diluted share in the prior year.
Segment Performance
Howmet Aerospace operates through four reportable segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. The financial performance of these segments for the third quarter of 2024 is detailed below:
| Segment | Third-party Sales (Q3 2024) | Segment Adjusted EBITDA (Q3 2024) | Adjusted EBITDA Margin (Q3 2024) |
|---|---|---|---|
| Engine Products | $945 million | $307 million | 32.5% |
| Fastening Systems | $392 million | $102 million | 26.0% |
| Engineered Structures | $253 million | $38 million | 15.0% |
| Forged Wheels | $245 million | $64 million | 26.1% |
Market Focus
Howmet Aerospace is positioned to capitalize on the recovery of the commercial aerospace market, with significant growth observed in the following areas:
- Commercial aerospace: Sales increased due to higher demand for aircraft components.
- Defense aerospace: Continued investment in defense contracts bolstered revenues.
- Industrial markets: Growth in industrial gas turbine and oil and gas sectors contributed to sales increases.
Operational Highlights
In 2024, Howmet Aerospace has focused on enhancing its manufacturing capabilities and optimizing its operational footprint. The company absorbed approximately 985 net headcount in the nine months ended September 30, 2024, in support of expected revenue increases.
Shareholder Returns
In line with its commitment to return capital to shareholders, Howmet Aerospace repurchased 4,039,319 shares in 2024 at an average price of $76.75 per share, totaling approximately $310 million. The company's dividend policy for 2025 is set to pay cash dividends at a rate of 15% plus or minus 5% of net income excluding special items.
Financial Metrics
The following financial metrics provide insight into Howmet Aerospace's performance as of September 30, 2024:
| Metric | Value |
|---|---|
| Cash and Cash Equivalents | $475 million |
| Total Assets | $10,364 million |
| Total Liabilities | $5,861 million |
| Total Equity | $4,503 million |
Conclusion
Howmet Aerospace Inc. continues to demonstrate strong financial performance and operational excellence, positioning itself as a leader in the aerospace and transportation sectors through innovation and a commitment to sustainable practices.
How Howmet Aerospace Inc. (HWM) Works
Company Overview
Howmet Aerospace Inc. operates through four reportable segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. The company primarily serves the aerospace and transportation industries, focusing on advanced manufacturing technologies.
Financial Performance
As of September 30, 2024, Howmet Aerospace reported net income of $332 million, or $0.81 per diluted share, compared to $188 million, or $0.45 per diluted share for the same period in 2023. For the nine months ended September 30, 2024, the net income was $841 million, or $2.04 per diluted share, compared to $529 million, or $1.27 per diluted share in 2023.
Segment Performance
The performance of each segment is measured by Segment Adjusted EBITDA. The following table summarizes the third-party sales and Segment Adjusted EBITDA for each segment for the third quarter and nine months ended September 30, 2024 and 2023:
| Segment | Third-party Sales (Q3 2024) | Segment Adjusted EBITDA (Q3 2024) | Third-party Sales (9M 2024) | Segment Adjusted EBITDA (9M 2024) |
|---|---|---|---|---|
| Engine Products | $945 million | $307 million | $2,763 million | $848 million |
| Fastening Systems | $392 million | $102 million | $1,175 million | $295 million |
| Engineered Structures | $253 million | $38 million | $790 million | $115 million |
| Forged Wheels | $245 million | $64 million | $811 million | $221 million |
Sales and Cost of Goods Sold
Total sales for the third quarter of 2024 were $1,835 million, an increase from $1,658 million in the third quarter of 2023. For the nine months ended September 30, 2024, total sales were $5,539 million compared to $4,909 million in 2023. The Cost of Goods Sold (COGS) as a percentage of sales was 68.3% in Q3 2024, down from 71.4% in Q3 2023.
Operating Expenses
Selling, general administrative, and other expenses (SG&A) were $85 million in Q3 2024, slightly down from $87 million in Q3 2023. For the nine months ended September 30, 2024, SG&A expenses increased to $270 million from $250 million in the same period of 2023.
Cash Flow and Capital Expenditures
Cash provided from operations was $818 million for the nine months ended September 30, 2024, compared to $443 million in the same period in 2023. Capital expenditures for the nine months ended September 30, 2024, totaled $219 million, compared to $164 million in 2023.
Debt and Share Repurchases
As of September 30, 2024, Howmet Aerospace had a total debt reduction of $768 million since December 31, 2022. The company repurchased 4,039,319 shares in 2024 at an average price of $76.75 per share.
Market Outlook
Demand in the commercial aerospace and defense sectors is expected to grow, despite challenges such as quality control issues and labor union work stoppages affecting production rates at key customers.
How Howmet Aerospace Inc. (HWM) Makes Money
Business Segments Overview
Howmet Aerospace operates through four primary segments:
- Engine Products
- Fastening Systems
- Engineered Structures
- Forged Wheels
Financial Performance
For the third quarter of 2024, Howmet Aerospace reported total sales of $1,835 million, compared to $1,658 million in the third quarter of 2023. For the nine months ended September 30, 2024, total sales reached $5,539 million, an increase from $4,909 million in the same period of 2023.
Segment Financials
The following table summarizes the financial performance of Howmet Aerospace's segments for the third quarter and nine months ended September 30, 2024:
| Segment | Third-party Sales (Q3 2024) | Segment Adjusted EBITDA (Q3 2024) | Segment Adjusted EBITDA Margin (Q3 2024) | Third-party Sales (9M 2024) | Segment Adjusted EBITDA (9M 2024) | Segment Adjusted EBITDA Margin (9M 2024) |
|---|---|---|---|---|---|---|
| Engine Products | $945 million | $307 million | 32.5% | $2,763 million | $848 million | 30.7% |
| Fastening Systems | $392 million | $102 million | 26.0% | $1,175 million | $295 million | 25.1% |
| Engineered Structures | $253 million | $38 million | 15.0% | $790 million | $115 million | 14.6% |
| Forged Wheels | $245 million | $64 million | 26.1% | $811 million | $221 million | 27.2% |
| Total | $1,835 million | $511 million | 27.8% | $5,539 million | $1,479 million | 26.7% |
Market Demand
Howmet Aerospace derives approximately 67% of its revenue from the aerospace markets (commercial and defense) for the nine months ended September 30, 2024. Major customers include General Electric Company and RTX Corporation, each representing around 10% of total sales in the same period.
Cost Structure
The cost of goods sold (COGS) as a percentage of sales was 68.3% in Q3 2024 and 69.1% for the nine months ended September 30, 2024, down from 71.4% and 72.2% in the respective periods of 2023. This reflects improved pricing and volume efficiencies.
Net Income and Earnings Per Share
For the third quarter of 2024, net income was $332 million, or $0.81 per diluted share, compared to $188 million or $0.45 per diluted share in the third quarter of 2023. For the nine months ended September 30, 2024, net income was $841 million, or $2.04 per diluted share, compared to $529 million or $1.27 per diluted share in the corresponding period of 2023.
Cash Flow and Capital Expenditures
Cash provided from operations was $818 million for the nine months ended September 30, 2024, compared to $443 million for the same period in 2023. Capital expenditures totaled $219 million in 2024, compared to $164 million in 2023.
Debt Management
As of September 30, 2024, Howmet Aerospace had long-term debt of $3,393 million. Interest expense for the nine months ended September 30, 2024, was $142 million, down from $166 million in the same period of 2023.
Share Repurchase Program
In 2024, Howmet repurchased 4,039,319 shares at an average price of $76.75, totaling $310 million. This is part of a broader share repurchase program authorized by the Board of Directors with approximately $2,297 million remaining as of October 31, 2024.
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Resources:
- Howmet Aerospace Inc. (HWM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Howmet Aerospace Inc. (HWM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Howmet Aerospace Inc. (HWM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.