Howmet Aerospace Inc.’s (HWM Quick QuoteHWM - Free Report) fourth-quarter 2024 adjusted earnings of 74 cents per share beat the Zacks Consensus Estimate of 72 cents. The bottom line surged 40% year over year.

Total revenues of $1.90 billion beat the consensus estimate of $1.88 billion. The top line increased 9% from the year-ago quarter. The increase was backed by strength in the company’s commercial aerospace market.

In 2024, HWM reported net revenues of $7.4 billion, which increased 12% year over year. The company’s adjusted earnings were $2.69 per share, up 46% year over year.

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Howmet’s Segmental Details

The Engine Products segment’s revenues totaled $972 million, representing 51.4% of net revenues. On a year-over-year basis, the segment’s revenues increased 14%, driven by growth in the commercial aerospace and defense aerospace markets. The Zacks Consensus Estimate for Engine Products’ revenues was pegged at $967 million.

The Fastening Systems segment generated revenues of $401 million, accounting for 21.2% of net revenues. Revenues increased 11% year over year, driven by growth in the commercial aerospace market, including wide-body aircraft recovery. The consensus estimate for Fastening Systems’ revenues was pegged at $404 million.

The Engineered Structures segment’s revenues, representing 14.5% of net revenues, increased 13% year over year to $275 million. The results benefited from growth in the commercial aerospace and defense aerospace markets. The Zacks Consensus Estimate for Engineered Structures’ revenues was pegged at $263 million.

The Forged Wheels segment’s revenues totaled $243 million, representing 12.9% of net revenues. On a year-over-year basis, the segment’s revenues were down 12% due to lower volumes in the commercial transportation market. The consensus estimate for Forged Wheels’ revenues was pegged at $241 million.

HWM’s Margin Profile

Howmet’s cost of goods sold increased 4.8% year over year to $1.3 billion. Selling, general, administrative and other expenses decreased 7.2% year over year to $77 million. Research and development expenses were $7 million.

Adjusted EBITDA, excluding special items, was $507 million, up 27.4% year over year. Adjusted EBITDA margin increased 380 basis points year over year to 26.8%. Operating income increased 36.5% year over year to $445 million.

The operating income margin was 23.5%, up 470 basis points year over year. Net interest expenses totaled $40 million, down 23.1% from the year-ago quarter.

Howmet’s Balance Sheet and Cash Flow

Exiting the fourth quarter, Howmet had cash and cash equivalents of $564 million compared with $610 million at the end of December 2023. Long-term debt (less amount due within one year) was $3.31 billion compared with $3.50 billion at the end of fourth-quarter 2023.

In 2024, Howmet generated net cash of $1.3 billion from operating activities compared with $901 million in the year-ago period. Capital spending totaled $321 million compared with $219 million a year ago. Free cash flow in the year was $977 million.

Howmet paid out dividends of $109 million in 2024 compared with $73 million in the year-ago period. Also, it repurchased shares worth $500 million compared with $250 million in the year-ago period.

HWM’s Q1 Outlook

For the first quarter, Howmet expects revenues to be in the range of $1.925-$1.945 billion. Adjusted EBITDA is expected to be between $515 million and $525 million while the adjusted EBITDA margin is anticipated to be in the range of 26.8-27.0%. Adjusted earnings per share are estimated to be in the range of 75-77 cents.

Howmet’s 2025 Outlook

Howmet predicts revenues to be in the range of $7.930-$8.130 billion. Adjusted EBITDA is expected to be between $2.105 billion and $2.155 billion while the adjusted EBITDA margin is projected to be 26.5%.

Adjusted earnings per share are forecasted to be in the band of $3.13-$3.21. Free cash flow is expected to be in the range of $1.025-$1.125 billion.

HWM’s Zacks Rank

The company currently carries a Zacks Rank #4 (Sell). 

You can see tthe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Tetra Tech, Inc. (TTEK Quick QuoteTTEK - Free Report) reported earnings of $0.35 per share in the first quarter of fiscal 2025 (ended December 2024), which beat the Zacks Consensus Estimate of $0.34. This compares with earnings of $0.28 per share a year ago.

Tetra posted revenues of $1.2 billion for the quarter ended December 2024, surpassing the consensus estimate by 8.85%. This compares with year-ago revenues of $1.02 billion. The company topped the consensus estimate for revenues in each of the last four quarters.

Waste Management, Inc. (WM Quick QuoteWM - Free Report) reported earnings of $1.70 per share in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $1.79. This compares with earnings of $1.74 per share a year ago.

WM reported revenues of $5.89 billion for the quarter ended December 2024, surpassing the consensus estimate by 0.18%. This compares with year-ago revenues of $5.22 billion. The company topped the consensus estimate for revenues two times in the last four quarters.

Packaging Corporation of America (PKG Quick QuotePKG - Free Report) reported adjusted earnings per share of $2.47 in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $2.51 by a margin of 2%. The bottom line matched PKG’s guidance and grew 16% year over year.

Sales in the fourth quarter rose 10.7% year over year to $2.15 billion due to higher volumes and price/mix in both segments. The top line beat the consensus estimate of $2.13 billion.