Howmet Aerospace 2025 Q1 Earnings Misses Targets but Net Income Surges 41.6%

Howmet Aerospace (HWM) reported its fiscal 2025 Q1 earnings on May 01st, 2025. The company revealed an increase in revenue and net income compared to the same quarter last year. However, despite the growth, earnings per share (EPS) fell short of analysts' expectations, missing the consensus estimate of $0.78 per share. The company provided guidance for the next quarter, indicating potential improvements with EPS expected to range between $0.85 and $0.87, and revenue targeting between $1.980 billion and $2.000 billion.

Revenue
Howmet Aerospace experienced a 6.5% increase in total revenue, reaching $1.94 billion in Q1 2025 compared to $1.82 billion in Q1 2024. The Engine Products segment was the top contributor, generating $996 million. Fastening Systems followed with $412 million, while Engineered Structures contributed $282 million. Forged Wheels added $252 million, culminating in the total segment revenue of $1.94 billion.

Earnings/Net Income
Howmet Aerospace's earnings per share (EPS) rose 44.1% to $0.85 in Q1 2025 from $0.59 in Q1 2024, showcasing continued earnings growth. Net income improved significantly, recording $344 million, a 41.6% increase from $243 million in the previous year. EPS growth indicates strong performance despite missing analyst expectations.

Price Action
The stock price of Howmet Aerospace edged up 1.07% during the latest trading day, increased by 10.89% over the last full trading week, and jumped 14.11% month-to-date.

Post Earnings Price Action Review
Following the earnings release, Howmet Aerospace (HWM) stock has shown a generally positive trend. Historically, maximum returns of 17.83% have been observed in the 30-day period post-earnings announcement. Short-term performance metrics indicate a higher probability of positive returns, with win rates of 61.90%, 71.43%, and 57.14% for 3-day, 10-day, and 30-day periods, respectively. This suggests investors often respond favorably to earnings reports, particularly in the immediate aftermath, driven by the company's robust financial indicators and market position.

CEO Commentary
Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant highlighted a strong start to 2025, showcasing record levels in revenue, Adjusted EBITDA, Adjusted EBITDA margin, and Adjusted Earnings Per Share. He noted significant margin improvements in the Fastening Systems and Engineered Structures segments. Free cash flow reached $134 million, an increase from $95 million year-over-year, marking eight consecutive quarters of positive cash flow generation. Plant emphasized the effective deployment of free cash flow through a 25% increase in dividends and substantial stock repurchases, while also noting the company’s upgraded investment-grade rating from Fitch.

Guidance
Looking ahead, Howmet Aerospace anticipates continued growth in the commercial aerospace market, driven by increasing air passenger traffic, particularly in Europe and Asia Pacific. However, the company acknowledges some moderation in North American traffic growth due to tariff impacts and economic uncertainty. The full-year 2025 guidance includes revenue expectations ranging from $7.880 billion to $8.180 billion, with Adjusted EBITDA projected between $2.225 billion and $2.275 billion, and Adjusted Earnings Per Share expected to range from $3.36 to $3.44.

Additional News
Howmet Aerospace has actively engaged in shareholder return initiatives, repurchasing $125 million of common stock in Q1 2025 at an average price of $124.24 per share. This was followed by an additional $100 million repurchase in April, reflecting the company's commitment to enhancing shareholder value. Moreover, the company announced a quarterly dividend of $0.10 per share, marking a 100% increase from the previous year. Fitch Ratings upgraded Howmet Aerospace's Long-Term Issuer Default Rating from BBB to BBB+, reflecting improved financial stability and creditworthiness.