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Howmet Aerospace Inc.’s (HWM - Free Report) first-quarter 2024 adjusted earnings of 57 cents per share beat the Zacks Consensus Estimate of 52 cents. The bottom line improved 35.7% year over year.
Total revenues of $1.8 billion surpassed the consensus estimate of $1.7 billion. The top line increased 14% from the year-ago quarter. The increase was backed by an improved commercial aerospace market.
Segmental Details
The Engine Products segment’s revenues totaled $885 million, representing 48.5% of net revenues. On a year-over-year basis, the segment’s revenues increased 11%, driven by growth in the commercial aerospace, defense aerospace, and oil & gas markets. The Zacks Consensus Estimate for Engine Products revenues was pegged at $882 million.
The Fastening Systems segment generated revenues of $389 million, accounting for 21.3% of net revenues. Revenues increased 26% year over year, driven by growth in the commercial aerospace market, including emerging wide-body aircraft recovery. The consensus estimate for Fastening Systems’ revenues was pegged at $351 million.
The Engineered Structures segment’s revenues, representing 14.4% of net revenues, increased 27% year over year to $262 million. The results benefited from growth in the commercial aerospace market, including wide-body aircraft recovery, and the defense aerospace market. The Zacks Consensus Estimate for Engineered Structures’ revenues was pegged at $233 million.
The Forged Wheels segment’s revenues totaled $288 million, representing 15.8% of net revenues. On a year-over-year basis, the segment’s revenues were flat. The consensus estimate for Forged Wheels’ revenues was pegged at $277 million.
Howmet Aerospace Inc. Price, Consensus and EPS Surprise
Howmet’s cost of goods sold increased 10.8% year over year to $1.2 billion. Selling, general, administrative and other expenses increased 17.3% year over year to $88 million. Research and development expenses were $10 million.
Adjusted EBITDA, excluding special items, was $437 million, up 21.4% year over year. Adjusted EBITDA margin increased 150 basis points year over year to 24%. Operating income increased 29.5% year over year to $369 million. The operating income margin in the quarter was 20.2%, up 240 basis points year over year. Net interest expenses totaled $49 million, down 14% from the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the first quarter of 2024, Howmet had cash and cash equivalents of $533 million compared with $610 million at the end of December 2023. Long-term debt (less amount due within one year) was $3.49 billion compared with $3.50 billion at the end of fourth-quarter 2023.
In the first three months of 2024, Howmet generated net cash of $177 million from operating activities compared with $23 million generated in the year-ago period. Capital spending totaled $82 million compared with $64 million spent a year ago. Free cash flow was $95 million.
Howmet, carrying a Zacks Rank #3 (Hold) currently, paid out dividends of $21 million in the first three months of 2024 compared with $17 million in the year-ago period. Also, it repurchased shares worth $150 million in the year compared with the $25 million buyback made a year ago. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q2 Outlook
For the second quarter of 2024, Howmet expects revenues to be $1.825 -$1.845 billion. Adjusted EBITDA is expected to be between $435 million and $445 million. Adjusted earnings per share are estimated to be in the range of 57-59 cents.
2024 Outlook
Howmet predicts revenues to be $7.225-$7.375 billion compared with $7.0-$7.2 billion predicted earlier. Adjusted EBITDA is expected to be between $1.720 billion and $1.780 billion while the adjusted EBITDA margin is projected to be 23.8-24.1%.
Adjusted earnings per share are forecasted in the band of $2.31-$2.39. Free cash flow is expected to be in the range of $750-$850 million for 2024.
Performance of Other Companies
IDEX Corporation’s (IEX - Free Report) second-quarter 2024 adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line decreased approximately 10.1%.
In the quarter under review, IDEX’s net sales of $800.5 million underperformed the consensus estimate of $805 million. The top line also decreased 5.3% year over year.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter 2024 adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line increased 6% on a year-over-year basis.
Net sales of $978.8 million missed the consensus estimate of $995 million. However, the top line inched up 1% year over year, driven by strong demand for commercial water heaters in North America.
W.W. Grainger, Inc. (GWW - Free Report) reported earnings per share of $9.62 for second-quarter 2024, beating the Zacks Consensus Estimate of $9.58. The bottom line improved 0.1% year over year.
Grainger’s quarterly revenues rose 3.5% year over year to $4.24 billion. The top line missed the consensus estimate of $4.27 billion.
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Howmet (HWM) Q1 Earnings Beat Estimates, Revenues Increase Y/Y
Howmet Aerospace Inc.’s (HWM - Free Report) first-quarter 2024 adjusted earnings of 57 cents per share beat the Zacks Consensus Estimate of 52 cents. The bottom line improved 35.7% year over year.
Total revenues of $1.8 billion surpassed the consensus estimate of $1.7 billion. The top line increased 14% from the year-ago quarter. The increase was backed by an improved commercial aerospace market.
Segmental Details
The Engine Products segment’s revenues totaled $885 million, representing 48.5% of net revenues. On a year-over-year basis, the segment’s revenues increased 11%, driven by growth in the commercial aerospace, defense aerospace, and oil & gas markets. The Zacks Consensus Estimate for Engine Products revenues was pegged at $882 million.
The Fastening Systems segment generated revenues of $389 million, accounting for 21.3% of net revenues. Revenues increased 26% year over year, driven by growth in the commercial aerospace market, including emerging wide-body aircraft recovery. The consensus estimate for Fastening Systems’ revenues was pegged at $351 million.
The Engineered Structures segment’s revenues, representing 14.4% of net revenues, increased 27% year over year to $262 million. The results benefited from growth in the commercial aerospace market, including wide-body aircraft recovery, and the defense aerospace market. The Zacks Consensus Estimate for Engineered Structures’ revenues was pegged at $233 million.
The Forged Wheels segment’s revenues totaled $288 million, representing 15.8% of net revenues. On a year-over-year basis, the segment’s revenues were flat. The consensus estimate for Forged Wheels’ revenues was pegged at $277 million.
Howmet Aerospace Inc. Price, Consensus and EPS Surprise
Howmet Aerospace Inc. price-consensus-eps-surprise-chart | Howmet Aerospace Inc. Quote
Margin Profile
Howmet’s cost of goods sold increased 10.8% year over year to $1.2 billion. Selling, general, administrative and other expenses increased 17.3% year over year to $88 million. Research and development expenses were $10 million.
Adjusted EBITDA, excluding special items, was $437 million, up 21.4% year over year. Adjusted EBITDA margin increased 150 basis points year over year to 24%. Operating income increased 29.5% year over year to $369 million. The operating income margin in the quarter was 20.2%, up 240 basis points year over year. Net interest expenses totaled $49 million, down 14% from the year-ago quarter.
Balance Sheet and Cash Flow
Exiting the first quarter of 2024, Howmet had cash and cash equivalents of $533 million compared with $610 million at the end of December 2023. Long-term debt (less amount due within one year) was $3.49 billion compared with $3.50 billion at the end of fourth-quarter 2023.
In the first three months of 2024, Howmet generated net cash of $177 million from operating activities compared with $23 million generated in the year-ago period. Capital spending totaled $82 million compared with $64 million spent a year ago. Free cash flow was $95 million.
Howmet, carrying a Zacks Rank #3 (Hold) currently, paid out dividends of $21 million in the first three months of 2024 compared with $17 million in the year-ago period. Also, it repurchased shares worth $150 million in the year compared with the $25 million buyback made a year ago. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q2 Outlook
For the second quarter of 2024, Howmet expects revenues to be $1.825 -$1.845 billion. Adjusted EBITDA is expected to be between $435 million and $445 million. Adjusted earnings per share are estimated to be in the range of 57-59 cents.
2024 Outlook
Howmet predicts revenues to be $7.225-$7.375 billion compared with $7.0-$7.2 billion predicted earlier. Adjusted EBITDA is expected to be between $1.720 billion and $1.780 billion while the adjusted EBITDA margin is projected to be 23.8-24.1%.
Adjusted earnings per share are forecasted in the band of $2.31-$2.39. Free cash flow is expected to be in the range of $750-$850 million for 2024.
Performance of Other Companies
IDEX Corporation’s (IEX - Free Report) second-quarter 2024 adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line decreased approximately 10.1%.
In the quarter under review, IDEX’s net sales of $800.5 million underperformed the consensus estimate of $805 million. The top line also decreased 5.3% year over year.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter 2024 adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line increased 6% on a year-over-year basis.
Net sales of $978.8 million missed the consensus estimate of $995 million. However, the top line inched up 1% year over year, driven by strong demand for commercial water heaters in North America.
W.W. Grainger, Inc. (GWW - Free Report) reported earnings per share of $9.62 for second-quarter 2024, beating the Zacks Consensus Estimate of $9.58. The bottom line improved 0.1% year over year.
Grainger’s quarterly revenues rose 3.5% year over year to $4.24 billion. The top line missed the consensus estimate of $4.27 billion.