On November 2, 2023, Howmet Aerospace Inc (HWM, Financial) released its third quarter 2023 earnings report. The company reported a 16% year-over-year increase in revenue, reaching $1.66 billion. This growth was primarily driven by a 23% increase in the commercial aerospace market. Net income for the quarter stood at $188 million, a significant increase from $80 million in Q3 2022.
Financial Highlights
The company's net income excluding special items was $192 million, up from $152 million in the same quarter of the previous year. Adjusted EBITDA excluding special items was $382 million, marking an 18% year-over-year increase. The company generated $191 million cash from operations and $132 million of free cash flow. The cash balance at the end of the quarter was $425 million, including impacts of debt redemption, common stock repurchases, and a $0.04 per share dividend on common stock.
Debt Redemption and Share Repurchases
In Q3 2023, Howmet Aerospace redeemed $200 million of its 5.125% Notes due October 2024, reducing the annualized interest expense by approximately $10 million. The company also repurchased $25 million of common stock at an average price of $49.32 per share, retiring approximately 0.5 million shares. As of October 31, 2023, the total share repurchase authorization available was $797 million.
Segment Performance
Howmet Aerospace's Engine Products segment reported a 17% year-over-year increase in revenue, reaching $798 million. The Fastening Systems segment saw a 20% increase in revenue, reaching $348 million. The Engineered Structures segment reported an 18% increase in revenue, reaching $227 million. The Forged Wheels segment reported a 7% increase in revenue, reaching $285 million.
Outlook
Howmet Aerospace's Executive Chairman and Chief Executive Officer, John Plant, expressed a positive outlook for the company, citing robust demand for new, more fuel-efficient aircraft and increased spares demand. The company has raised its full year 2023 guidance for revenue, adjusted EBITDA, and adjusted earnings per share. Preliminary revenue growth guidance for 2024 is set at approximately 7%.
Explore the complete 8-K earnings release (here) from Howmet Aerospace Inc for further details.
