Howmet Aerospace Reports First Quarter 2025 Results

Record Revenue Up 6% Year Over Year, Record Profit, Strong Cash from Operations

$125 Million Deployed for Common Stock Repurchases, Additional $100 Million in April

Full Year 2025 Guidance¹: Revenue Range Widened, Increases to Adj. EBITDA*, Adj. EPS*, Free Cash Flow

Howmet Aerospace (NYSE:HWM):

First Quarter 2025 GAAP Financial Results

• Revenue of $1.94 billion, up 6% year over year, driven by Commercial Aerospace, up 9%
• Operating Income Margin of 25.4%
• Net Income of $344 million versus $243 million in the first quarter 2024; Earnings per Share of $0.84 versus $0.59 in the first quarter 2024
• Generated $253 million of Cash from Operations; $167 million of Cash used for Financing Activities; and $115 million of Cash used for Investing Activities
• Share repurchases of $125 million; $0.10 per share common stock dividend, up 100% year over year

First Quarter 2025 Adjusted Financial Results

• Adjusted EBITDA excluding special items of $560 million, up 28% year over year
• Adjusted EBITDA margin excluding special items of 28.8%, up 480 basis points year over year
• Adjusted Operating Income Margin excluding special items of 25.3%, up 500 basis points year over year
• Adjusted Earnings Per Share excluding special items of $0.86, up 51% year over year
• Generated $134 million of free cash flow

Key Announcements

• Repurchased $125 million of common stock in first quarter 2025 at average price of $124.24 per share
• Repurchased an additional $100 million of common stock in April 2025 at average price of $125.61 per share
• Paid a quarterly dividend of $0.10 per share on the Company's common stock in first quarter 2025, up 100% from first quarter 2024's $0.05 dividend per share
• Fitch Ratings upgraded Howmet Aerospace's Long-Term Issuer Default Rating from BBB to BBB+ on March 31, 2025
• Full Year 2025 Guidance: Revenue range widened with increases to Adj. EBITDA*, Adj. EPS*, and Free Cash Flow

Howmet Aerospace (NYSE:HWM) today reported first quarter 2025 results. The Company reported record first quarter 2025 revenue of $1.94 billion, up 6% year over year, primarily driven by growth in the commercial aerospace market of 9%.

Howmet Aerospace reported Net Income of $344 million, or $0.84 per share, in the first quarter 2025 versus $243 million, or $0.59 per share, in the first quarter 2024, and included approximately $7 million in net charges from special items. Net Income excluding special items was $351 million, or $0.86 per share, in the first quarter 2025, versus $238 million, or $0.57 per share, in the first quarter 2024.

First quarter 2025 Operating Income was $494 million, up 34% year over year. Operating Income excluding special items was $491 million, up 33% year over year. Operating Income Margin was 25.4%, up approximately 520 basis points year over year. First quarter 2025 Adjusted Operating Income Margin excluding special items was 25.3%, up approximately 500 basis points year over year.

First quarter 2025 Adjusted EBITDA excluding special items was $560 million, up 28% year over year. The year-over-year increase was driven by strong growth and performance in the commercial and defense aerospace markets, partially offset by declines in the commercial transportation market. Adjusted EBITDA margin excluding special items was up approximately 480 basis points year over year at 28.8%.

Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant said, "The Howmet team delivered a solid start to 2025, setting quarterly records in revenue, Adjusted EBITDA*, Adjusted EBITDA margin*, and Adjusted Earnings Per Share* while exceeding all aspects of our baseline guidance. Margin progression within the Fastening Systems and Engineered Structures segments was particularly noteworthy. Free cash flow was healthy at $134 million, up from $95 million in the prior year, and marked the eighth consecutive quarter of positive free cash flow generation."

Mr. Plant continued, "Free cash flow was deployed with a $0.10 per share common stock dividend, up 25% from the prior quarter, $125 million of common stock repurchases in the first quarter 2025, and an additional $100 million of repurchases in April. Howmet Aerospace's strong balance sheet continues to be recognized by the rating agencies, with Fitch upgrading its debt rating on the Company to BBB+, three notches into Investment Grade."

"Turning to the outlook, the commercial aerospace market remains poised for continued growth. Air passenger traffic continues to grow, led more recently by Europe and Asia Pacific. There has been some recent moderation in North American traffic growth, driven by tariff-related and economic uncertainty. Nevertheless, Howmet Aerospace's engine and airframe OEM customers continue to demonstrate growth, with record backlogs supported by under-build of aircraft in recent years and the desire for new, fuel-efficient aircraft. We continue to expect healthy growth in the defense aerospace market as well as industrial and other, with demand for industrial gas turbine fueled by significant data center expansion. For commercial transportation, a potential increase in truck builds in the second half of 2025 is less certain, given tariff-related and economic uncertainty in North America. However, our premium products and strong market position should allow Howmet Aerospace to continue to outperform the overall market. While the tariff situation remains fluid, we expect to pass on tariff-related costs to our customers. Taking these factors into account including the impact of tariffs, for the full year 2025 guidance, the revenue range has been widened with increases to Adjusted EBITDA*, Adjusted EPS*, and Free Cash Flow. The balance sheet continues to strengthen, and liquidity remains healthy."

First Quarter 2025 Segment Performance

Engine Products reported first quarter 2025 revenue of $996 million, an increase of 13% year over year, due to growth in the commercial aerospace, defense aerospace, industrial gas turbine, and oil and gas markets. Segment Adjusted EBITDA was $325 million, up 31% year over year, driven by favorable growth in the commercial aerospace, defense aerospace, industrial gas turbine, and oil and gas markets. The Segment absorbed approximately 500 net headcount in the quarter in support of expected revenue increases. Segment Adjusted EBITDA margin increased approximately 450 basis points year over year to 32.6%.

Fastening Systems reported revenue of $412 million, an increase of 6% year over year due to growth in the commercial aerospace market, partially offset by declines in the commercial transportation market. Segment Adjusted EBITDA was $127 million, up 38% year over year, driven by growth in the commercial aerospace market as well as productivity gains, partially offset by declines in the commercial transportation market. Segment Adjusted EBITDA margin increased approximately 710 basis points year over year to 30.8%.

Engineered Structures reported revenue of $282 million, an increase of 8% year over year due to growth in the defense aerospace market. Segment Adjusted EBITDA was $60 million, up 62% year over year, driven by growth in the defense aerospace market as well as productivity gains. Segment Adjusted EBITDA margin increased approximately 720 basis points year over year to 21.3%.

Forged Wheels reported revenue of $252 million, a decrease of 13% year over year due to lower volumes in the commercial transportation market, partially offset by an increase in aluminum and other inflationary cost pass through. Segment Adjusted EBITDA was $68 million and decreased 17% year over year due to lower volumes in the commercial transportation market. Segment Adjusted EBITDA margin decreased approximately 150 basis points year over year to 27.0%.

Repurchased $125 Million of Common Stock in First Quarter 2025, $100 Million in April 2025

In the first quarter 2025, Howmet Aerospace repurchased $125 million of common stock at an average price of $124.24 per share, retiring approximately 1.0 million shares. In April 2025, the Company repurchased an additional $100 million of common stock at an average price of $125.61 per share, retiring approximately 0.8 million shares. As of April 30, 2025, total share repurchase authorization available was $1.972 billion.

Quarterly Common Stock Dividend of $0.10 Per Share Paid in First Quarter 2025

On February 25, 2025, the Company paid a quarterly dividend of $0.10 per share on its common stock, up 100% from the $0.05 per share dividend paid in the first quarter 2024. The Board of Directors announced a quarterly dividend of $0.10 per share on the Company's common stock to be paid on May 27, 2025 to the holders of record of the common stock at the close of business on May 9, 2025.

Fitch Upgraded Howmet Aerospace Rating to BBB+

On March 31, 2025, Fitch Ratings upgraded Howmet Aerospace's Long-Term Issuer Default Rating from BBB to BBB+, three notches into Investment Grade.

Howmet Aerospace will hold its quarterly conference call at 10:00 AM Eastern Time on Thursday, May 1, 2025. The call will be webcast via www.howmet.com. The press release and presentation materials will be available at approximately 7:00 AM ET on May 1, via the "Investors" section of the Howmet Aerospace website.

About Howmet Aerospace

Howmet Aerospace Inc., headquartered in Pittsburgh, Pennsylvania, is a leading global provider of advanced engineered solutions for the aerospace and transportation industries. The Company's primary businesses focus on jet engine components, aerospace fastening systems, and airframe structural components necessary for mission-critical performance and efficiency in aerospace and defense applications, as well as forged aluminum wheels for commercial transportation. With approximately 1,170 granted and pending patents, the Company's differentiated technologies enable lighter, more fuel-efficient aircraft and commercial trucks to operate with a lower carbon footprint. For more information, visit www.howmet.com.

Dissemination of Company Information

Howmet Aerospace intends to make future announcements regarding Company developments and financial performance through its website at www.howmet.com.

Forward-Looking Statements

This release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "anticipates", "believes", "could", "envisions", "estimates", "expects", "forecasts", "goal", "guidance", "intends", "may", "outlook", "plans", "poised", "projects", "seeks", "sees", "should", "targets", "will", "would", or other words of similar meaning. All statements that reflect Howmet Aerospace's expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements, forecasts and outlook relating to the condition of markets; future financial results or operating performance; future strategic actions; Howmet Aerospace's strategies, outlook, and business and financial prospects; and any future dividends, debt issuances, debt reduction and repurchases of its common stock. These statements reflect beliefs and assumptions that are based on Howmet Aerospace's perception of historical trends, current conditions and expected future developments, as well as other factors Howmet Aerospace believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and changes in circumstances that are difficult to predict, which could cause actual results to differ materially from those indicated by these statements. Such risks and uncertainties include, but are not limited to: (a) deterioration in global economic and financial market conditions generally, or unfavorable changes in the markets served by Howmet Aerospace, including due to escalating tariff and other trade policies and the resulting impacts on Howmet Aerospace's supply and distribution chains, as well as on market volatility and global trade generally; (b) the impact of potential cyber attacks and information technology or data security breaches; (c) the loss of significant customers or adverse changes in customers' business or financial conditions; (d) manufacturing difficulties or other issues that impact product performance, quality or safety; (e) inability of suppliers to meet obligations due to supply chain disruptions or otherwise; (f) failure to attract and retain a qualified workforce and key personnel, labor disputes or other employee relations issues; (g) the inability to achieve improvement in or strengthening of financial performance, operations or competitiveness anticipated or targeted; (h) inability to meet increased demand, production targets or commitments; (i) competition from new product offerings, disruptive technologies or other developments; (j) geopolitical, economic, and regulatory risks relating to Howmet Aerospace's global operations, including geopolitical and diplomatic tensions, instabilities, conflicts and wars, as well as compliance with U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations; (k) the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation; (l) failure to comply with government contracting regulations; (m) adverse changes in discount rates or investment returns on pension assets; and (n) the other risk factors summarized in Howmet Aerospace's Form 10-K for the year ended December 31, 2024 and other reports filed with the U.S. Securities and Exchange Commission. Market projections are subject to the risks discussed above and other risks in the market. Under its share repurchase program, the Company may repurchase shares from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations. The Company is not obligated to repurchase any specific number of shares or to do so at any particular time. The declaration of any future dividends is subject to the discretion and approval of the Board of Directors after the Board's consideration of all factors it deems relevant and subject to applicable law. The Company may modify, suspend, or cancel its share repurchase program or its dividend policy in any manner and at any time that it may deem necessary or appropriate. Credit ratings are not a recommendation to buy or hold any Howmet Aerospace securities, and they may be revised or revoked at any time at the sole discretion of the credit rating organizations. The statements in this release are made as of the date of this release, even if subsequently made available by Howmet Aerospace on its website or otherwise. Howmet Aerospace disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.

Non-GAAP Financial Measures

Some of the information included in this release is derived from Howmet Aerospace's consolidated financial information but is not presented in Howmet Aerospace's financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Certain of these data are considered "non-GAAP financial measures" under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. Reconciliations to the most directly comparable GAAP financial measures and management's rationale for the use of the non-GAAP financial measures can be found in the schedules to this release.

Other Information

In this press release, the acronym "FY" means "full year"; "Q" means "quarter"; "YoY" means year over year; "Adj." means adjusted; and references to performance by Howmet Aerospace or its segments as "record" mean its best result since April 1, 2020 when Howmet Aerospace Inc. (previously named Arconic Inc.) separated from Arconic Corporation.

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