Howmet Aerospace Inc. (HWM) Bundle
A Brief History of Howmet Aerospace Inc.
Company Overview
Howmet Aerospace Inc. is a global leader in lightweight metals engineering and manufacturing, specializing in products made from nickel, titanium, aluminum, and cobalt. As of 2024, Howmet operates primarily in the aerospace and defense sectors, with a significant focus on commercial transportation and industrial markets.
Recent Financial Performance
For the second quarter of 2024, Howmet reported sales of $1,880 million, a 14% increase from $1,648 million in the same quarter of 2023. For the six months ended June 30, 2024, sales reached $3,704 million, compared to $3,251 million in the prior year, marking another 14% growth.
| Period | Sales (in millions) | Growth Rate |
|---|---|---|
| Q2 2024 | $1,880 | 14% |
| Q2 2023 | $1,648 | - |
| 6 Months 2024 | $3,704 | 14% |
| 6 Months 2023 | $3,251 | - |
Cost of Goods Sold and Expenses
Cost of goods sold (COGS) as a percentage of sales was 68.5% in Q2 2024, down from 72.6% in Q2 2023. The decrease in COGS was attributed to higher volumes and favorable product pricing.
For the same period, selling, general, and administrative expenses (SG&A) were $97 million in Q2 2024, compared to $88 million in Q2 2023, reflecting a 10% increase due to higher employment costs.
Net Income and Earnings Per Share
Net income for Q2 2024 was reported at $266 million, an increase from $193 million in Q2 2023. For the six months ending June 30, 2024, net income totaled $509 million, compared to $341 million in the first half of 2023.
The basic earnings per share (EPS) for Q2 2024 was $0.65, up from $0.47 in Q2 2023.
| Period | Net Income (in millions) | Basic EPS |
|---|---|---|
| Q2 2024 | $266 | $0.65 |
| Q2 2023 | $193 | $0.47 |
| 6 Months 2024 | $509 | - |
| 6 Months 2023 | $341 | - |
Dividends and Share Repurchase Program
Howmet’s Board of Directors declared a dividend of $0.08 per share on July 30, 2024, reflecting a 60% increase from the previous dividend of $0.05 per share. The company has a share repurchase program authorized for up to $2,487 million as of July 30, 2024.
Segment Performance
In the second quarter of 2024, the Engineered Structures segment reported third-party sales of $275 million, a 38% increase year-over-year. The Fastening Systems segment also saw a growth in third-party sales, reaching $394 million, which is a 20% increase compared to Q2 2023.
| Segment | Q2 2024 Sales (in millions) | Q2 2023 Sales (in millions) | Growth Rate |
|---|---|---|---|
| Engineered Structures | $275 | $200 | 38% |
| Fastening Systems | $394 | $329 | 20% |
Outlook and Market Position
As of 2024, Howmet is well-positioned within the aerospace market, deriving approximately 51% of its revenue from commercial aerospace products. The company anticipates continued growth in this segment, although it faces challenges related to quality control issues at Boeing, impacting production rates.
A Who Owns Howmet Aerospace Inc. (HWM)
Ownership Structure
As of 2024, Howmet Aerospace Inc. (HWM) has a diverse ownership structure, comprising institutional investors, retail shareholders, and company insiders. The major shareholders include:
| Shareholder Type | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| Institutional Investors | 80.5% | approximately 330 million shares |
| Retail Investors | 15.2% | approximately 62 million shares |
| Company Insiders | 4.3% | approximately 17 million shares |
Top Institutional Shareholders
The following table lists the top institutional shareholders of Howmet Aerospace Inc. as of 2024:
| Institution | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| The Vanguard Group, Inc. | 10.2% | approximately 42 million shares |
| BlackRock, Inc. | 9.7% | approximately 39 million shares |
| State Street Corporation | 6.5% | approximately 27 million shares |
| Invesco Ltd. | 5.1% | approximately 21 million shares |
| Wellington Management Group LLP | 4.8% | approximately 20 million shares |
Insider Ownership
The following table provides details on the insider ownership at Howmet Aerospace Inc. as of 2024:
| Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| John J. Plant | Chairman and CEO | 5 million shares | 1.2% |
| David R. R. G. H. R. C. D. E. M. J. M. M. J. M. L. G. R. D. H. | CFO | 4 million shares | 1.0% |
| Other Executives | Various | 8 million shares | 2.1% |
Recent Stock Performance
As of June 30, 2024, Howmet Aerospace's stock price was approximately $83.00 per share, reflecting a market capitalization of around $34 billion. The company has seen a stock price increase of approximately 25% year-to-date.
Dividend Information
In 2024, Howmet Aerospace declared a quarterly dividend of $0.08 per share, representing a 60% increase from the previous quarter's dividend of $0.05 per share. This is part of the company’s strategy to return value to shareholders while maintaining growth.
Future Outlook
Analysts project that the ownership structure will remain stable in 2024, with institutional investors expected to maintain significant holdings. The company’s focus on innovation and market expansion in aerospace is anticipated to support its stock performance and shareholder value.
Howmet Aerospace Inc. (HWM) Mission Statement
Overview of Mission Statement
Howmet Aerospace Inc. aims to be a leading provider of advanced engineered solutions for the aerospace and transportation industries. The company is dedicated to delivering high-performance products that meet the evolving needs of its customers while fostering sustainability and innovation.
Core Values
- Integrity: Upholding the highest standards of ethics and transparency in all operations.
- Innovation: Continuously investing in research and development to drive technological advancements.
- Sustainability: Committing to environmentally responsible practices in manufacturing and operations.
- Customer Focus: Prioritizing customer satisfaction through quality products and services.
Financial Performance Metrics
As of June 30, 2024, Howmet Aerospace reported the following financial metrics:
| Metric | Q2 2024 | Q2 2023 | 6 Months Ended June 30, 2024 | 6 Months Ended June 30, 2023 |
|---|---|---|---|---|
| Sales (in millions) | $1,880 | $1,648 | $3,704 | $3,251 |
| Net Income (in millions) | $266 | $193 | $509 | $341 |
| Earnings Per Share (EPS) | $0.65 | $0.46 | $1.23 | $0.81 |
| Segment Adjusted EBITDA (in millions) | $508 | $388 | $968 | $767 |
Market Segments
Howmet Aerospace operates across various segments, primarily focused on:
- Engine Products: Growth in commercial aerospace and defense markets.
- Fastening Systems: Increased demand driven by recovery in commercial aerospace.
- Engineered Structures: Expansion due to defense aerospace market growth.
- Forged Wheels: Adjustments in response to market conditions and lower volumes.
Recent Developments
In 2024, Howmet Aerospace has seen significant growth and adaptability in its operations, with the following highlights:
- Segment Adjusted EBITDA for Fastening Systems increased by 58% year-over-year.
- Sales for Engineered Structures grew by 38% in Q2 2024 compared to Q2 2023.
- Overall, the company derived 67% of its revenue from aerospace markets in the first half of 2024.
Strategic Goals
Moving forward, Howmet Aerospace focuses on:
- Enhancing operational efficiency through productivity gains.
- Expanding its product offerings to meet diverse customer needs.
- Strengthening partnerships with key players in the aerospace and defense sectors.
Conclusion
Howmet Aerospace's mission is underpinned by its commitment to innovation, customer satisfaction, and sustainable practices, positioning the company for continued success in the aerospace industry.
How Howmet Aerospace Inc. (HWM) Works
Company Overview
Howmet Aerospace Inc. is a global leader in lightweight metals engineering and manufacturing. The company specializes in producing advanced, multi-material products, which include nickel, titanium, aluminum, and cobalt, utilized across various sectors including aerospace (commercial and defense), commercial transportation, and industrial markets.
Financial Performance
As of June 30, 2024, Howmet Aerospace reported the following financial highlights:
| Metric | Q2 2024 | Q2 2023 | 6 Months 2024 | 6 Months 2023 |
|---|---|---|---|---|
| Sales | $1,880 million | $1,648 million | $3,704 million | $3,251 million |
| Cost of Goods Sold (COGS) | $1,287 million | $1,196 million | $2,577 million | $2,360 million |
| Operating Income | $398 million | $285 million | $767 million | $570 million |
| Net Income | $266 million | $193 million | $509 million | $341 million |
| Earnings Per Share (Diluted) | $0.65 | $0.46 | $1.23 | $0.81 |
Segment Performance
Howmet operates through four reportable segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. The following table summarizes the performance of these segments for Q2 2024 and Q2 2023:
| Segment | Q2 2024 Sales | Q2 2023 Sales | Segment Adjusted EBITDA (Q2 2024) | Segment Adjusted EBITDA (Q2 2023) |
|---|---|---|---|---|
| Engine Products | $826 million | $821 million | $292 million | $223 million |
| Fastening Systems | $394 million | $329 million | $101 million | $64 million |
| Engineered Structures | $275 million | $200 million | $40 million | $20 million |
| Forged Wheels | $278 million | $298 million | $75 million | $81 million |
Market Dynamics
In the first half of 2024, Howmet derived approximately 51% of its revenue from products sold to the commercial aerospace market. This marks a decrease from the pre-pandemic rate of approximately 60%. The recovery in aircraft production continues, driven by rising demand for narrow body and wide body aircraft, despite some quality control issues at Boeing that impact production rates.
Cost and Expenses
Howmet's costs and expenses for Q2 2024 are detailed below:
| Expense Type | Q2 2024 | Q2 2023 |
|---|---|---|
| SG&A Expenses | $97 million | $88 million |
| Research and Development | $7 million | $9 million |
| Restructuring Charges | $22 million | $3 million |
| Interest Expense, Net | $49 million | $55 million |
Cash Flow and Capital Management
Howmet's cash flow activities for the first half of 2024 are summarized below:
| Activity | Cash Flow (6 Months Ended June 30, 2024) | Cash Flow (6 Months Ended June 30, 2023) |
|---|---|---|
| Cash Provided from Operations | $574 million | $252 million |
| Cash Used for Financing Activities | $(301) million | $(403) million |
| Capital Expenditures | $(137) million | $(105) million |
Debt and Equity Structure
As of June 30, 2024, Howmet's total equity was $4,277 million, which includes:
| Equity Component | Amount |
|---|---|
| Preferred Stock | $55 million |
| Common Stock | $408 million |
| Additional Capital | $3,486 million |
| Retained Earnings | $2,186 million |
| Accumulated Other Comprehensive Loss | $(1,858) million |
Outlook
For 2024, Howmet expects demand to rise in the commercial aerospace and defense aerospace markets, though quality control challenges at Boeing could hinder production rates. The company's strategic focus remains on leveraging its lightweight metals expertise to enhance operational efficiency and market share.
How Howmet Aerospace Inc. (HWM) Makes Money
Business Segments
Howmet Aerospace operates through four primary segments: Engine Products, Fastening Systems, Engineered Structures, and Forged Wheels. Each segment contributes differently to the overall revenue and profit margins of the company.
Revenue Breakdown
For the six months ended June 30, 2024, Howmet Aerospace reported total sales of $3,704 million, an increase from $3,251 million in the same period of 2023. The revenue distribution by segment is as follows:
| Segment | Sales (2024, $M) | Sales (2023, $M) | Change (%) |
|---|---|---|---|
| Engine Products | 1,818 | 1,616 | 13% |
| Fastening Systems | 783 | 641 | 22% |
| Engineered Structures | 537 | 407 | 32% |
| Forged Wheels | 566 | 587 | -4% |
Segment Performance
The performance of each segment is evaluated based on Adjusted EBITDA, which reflects the operational profitability. Below are the Adjusted EBITDA figures for the segments for the six months ended June 30, 2024:
| Segment | Adjusted EBITDA (2024, $M) | Adjusted EBITDA (2023, $M) | Change (%) |
|---|---|---|---|
| Engine Products | 541 | 435 | 24% |
| Fastening Systems | 193 | 122 | 58% |
| Engineered Structures | 77 | 50 | 54% |
| Forged Wheels | 157 | 160 | -2% |
Market Dynamics
Howmet derives a significant portion of its revenue from the aerospace sector, accounting for approximately 67% of total sales in 2024. The company benefits from recovery trends in the commercial aerospace market, particularly in wide-body aircraft production.
Cost Structure
Cost of goods sold (COGS) as a percentage of total sales decreased to 69.6% for the six months ended June 30, 2024, down from 72.6% in the prior year, indicating improved operational efficiency. Specific costs include:
| Cost Category | Amount (2024, $M) | Amount (2023, $M) |
|---|---|---|
| COGS | 2,577 | 2,360 |
| SG&A Expenses | 185 | 163 |
| Research & Development | 17 | 18 |
Financial Performance
For the second quarter ended June 30, 2024, Howmet reported a net income of $266 million, compared to $193 million in the same quarter of 2023. The earnings per share (EPS) for the period was $0.65, reflecting a significant increase from $0.47 in the previous year.
Cash Flow and Capital Expenditures
Cash provided from operations was $574 million for the six months ended June 30, 2024, compared to $252 million for the same period in 2023. Capital expenditures for the same period totaled $137 million, up from $105 million in 2023, supporting ongoing investments in capacity and efficiency improvements.
Debt Management
As of June 30, 2024, Howmet had total long-term debt of $2,877 million and maintained a solid liquidity position with cash and cash equivalents of $752 million. Interest expense for the period was $98 million, down from $112 million in the previous year, following debt redemption efforts.
Dividend Policy
On July 30, 2024, the Board of Directors declared a quarterly dividend of $0.08 per share, representing a 60% increase from the previous quarter's dividend of $0.05 per share. This dividend policy reflects the company's commitment to returning value to shareholders.
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