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Howmet Aerospace stock rallies 8% on strong Q1 earnings

Published 05/02/2024, 07:45 AM
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NEW YORK - Howmet Aerospace Inc. (NYSE: HWM (BMV:HWM)) reported a robust first quarter for 2024, surpassing analyst expectations with an earnings per share (EPS) of $0.59, a significant increase from the $0.52 reported in the same quarter last year.

The company's revenue also saw a healthy year-over-year (YoY) increase, rising 14% to $1.82 billion, driven largely by a 23% growth in its commercial aerospace segment. The positive earnings report sent Howmet Aerospace's stock soaring, with an 8% increase in share price, signaling strong investor confidence.

The company's adjusted EPS for the quarter stood at $0.57, marking a 36% increase YoY. This performance exceeded the high end of the company's guidance on all metrics, including record quarterly results in revenue, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA margin, and adjusted EPS.

Free cash flow for the quarter was reported at $95 million, marking the first time the company has generated positive cash flow in the first quarter of a year.

Looking ahead, Howmet Aerospace provided guidance for the second quarter of 2024, projecting an EPS range of $0.57 to $0.59, which is above the analyst consensus of $0.54. The company also forecasts Q2 revenue to be between $1.825 billion and $1.845 billion, surpassing the consensus estimate of $1.77 billion.

For the full year 2024, the company anticipates an EPS of $2.31 to $2.39, compared to the consensus of $2.20, and expects revenue to be in the range of $7.225 billion to $7.375 billion, which is also above the consensus of $7.15 billion.

Howmet Aerospace's Executive Chairman and CEO, John Plant, highlighted the company's outstanding start to the year, attributing the success to robust demand for air travel and record aircraft OEM backlogs. Despite slower production of the 737 MAX due to quality issues at Boeing (NYSE:BA), the company has increased its full-year 2024 revenue guidance by $200 million.

Plant also noted the company's strong balance sheet and record low leverage, along with solid cash generation that supported $150 million in common stock repurchases in the first quarter. Furthermore, the company anticipates a 40% increase in the common stock dividend to $0.07 per share in the third quarter of 2024, subject to Board approval.

Investors have responded positively to the company's strong earnings and optimistic outlook, as reflected in the significant rise in Howmet Aerospace's stock price following the earnings release.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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