Howmet's Q1 Earnings & Revenues Surpass Estimates, Increase Y/Y

Howmet Aerospace Inc.’s HWM first-quarter 2025 adjusted earnings of 86 cents per share beat the Zacks Consensus Estimate of 77 cents. The bottom line surged 51% year over year.

Total revenues of $1.94 billion beat the consensus estimate of $1.93 billion. The top line increased 6% from the year-ago quarter. The increase was backed by strength in the company’s commercial aerospace market. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Howmet’s Segmental Details

The Engine Products segment’s revenues totaled $996 million, representing 51.3% of net revenues. On a year-over-year basis, the segment’s revenues increased 13%, driven by growth in the commercial aerospace, defense aerospace, industrial gas turbine, and oil and gas markets. The Zacks Consensus Estimate for Engine Products’ revenues was pegged at $992 million.

The Fastening Systems segment generated revenues of $412 million, accounting for 21.3% of net revenues. Revenues increased 6% year over year, driven by growth in the commercial aerospace market, partially offset by softness in the commercial transportation market. The consensus estimate for Fastening Systems’ revenues was pegged at $414 million.

The Engineered Structures segment’s revenues, representing 14.5% of net revenues, increased 8% year over year to $282 million. The results benefited from growth in the defense aerospace market. The Zacks Consensus Estimate for Engineered Structures’ revenues was pegged at $277 million.

The Forged Wheels segment’s revenues totaled $252 million, representing 12.9% of net revenues. On a year-over-year basis, the segment’s revenues were down 12.5% owing to lower volumes in the commercial transportation market. The consensus estimate for Forged Wheels’ revenues was pegged at $248 million.

Howmet Aerospace Inc. Price, Consensus and EPS Surprise

Howmet Aerospace Inc. price-consensus-eps-surprise-chart | Howmet Aerospace Inc. Quote

HWM’s Margin Profile

Howmet’s cost of goods sold was flat year over year at $1.29 billion. Selling, general, administrative and other expenses decreased 3.4% year over year to $85 million. Research and development expenses were $8 million.

Adjusted EBITDA, excluding special items, was $560 million, up 28% year over year. Adjusted EBITDA margin increased 480 basis points year over year to 28.8%. Adjusted operating income increased 33% year over year to $491 million.

The adjusted operating income margin was 25.3%, up 500 basis points year over year. Net interest expenses totaled $39 million, down 20% from the year-ago quarter.

Howmet’s Balance Sheet and Cash Flow

Exiting the first quarter, Howmet had cash and cash equivalents of $536 million compared with $564 million at the end of December 2024. Long-term debt (less amount due within one year) was $3.31 billion, relatively stable from the end of fourth-quarter 2024.

In the first three months of 2025, Howmet generated net cash of $253 million from operating activities compared with $177 million in the year-ago period. Capital spending totaled $119 million compared with $82 million a year ago. Free cash flow in the same period was $134 million.

Howmet paid out dividends of $42 million in the first three months of 2025 compared with $21 million in the year-ago period. Also, it repurchased shares worth $125 million compared with $150 million in the year-ago period.

HWM’s Q2 Outlook

For the second quarter of 2025, Howmet expects revenues to be in the range of $1.98-$2.0 billion. Adjusted EBITDA is expected to be between $555 million and $565 million, while the adjusted EBITDA margin is anticipated to be in the range of 28.0-28.3%. Adjusted earnings per share are estimated to be in the range of 85-87 cents.

Howmet’s 2025 Outlook

Howmet predicts revenues to be in the range of $7.88-$8.18 billion. Adjusted EBITDA is expected to be between $2.225 billion and $2.275 billion, while the adjusted EBITDA margin is projected to be between 27.8% and 28.2%.

Adjusted earnings per share are forecasted to be in the band of $3.36-$3.44. Free cash flow is expected to be in the range of $1.1-$1.12 billion.

Zacks Rank & Stocks to Consider

HWM currently carries a Zacks Rank #4 (Sell). 

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

Some better-ranked companies are discussed below:

Griffon Corporation GFF currently sports a Zacks Rank of 1. GFF delivered a trailing four-quarter average earnings surprise of 14.7%. In the past 60 days, the consensus estimate for Griffon’s fiscal 2025 (ending September 2025) earnings has increased 2.9%.

Insteel Industries IIIN currently carries a Zacks Rank #2 (Buy). IIIN delivered a trailing four-quarter average earnings surprise of 122.4%. In the past 60 days, the Zacks Consensus Estimate for Insteel Industries’ fiscal 2025 earnings has increased 34.8%.

Energy Recovery ERII presently carries a Zacks Rank of 2. ERII delivered a trailing four-quarter average earnings surprise of 161.6%. In the past 60 days, the consensus estimate for Energy Recovery’s 2025 earnings has increased 1.3%.

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This article originally published on Zacks Investment Research (zacks.com).

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