Howmet Aerospace Closes Out 2024 with Record Results and a Strong Foundation for 2025
The fourth quarter of 2024 marked a significant milestone for Howmet Aerospace, as the company reported record revenues, EBITDA, EBITDA margin, and earnings per share. According to John Plant, Executive Chairman and Chief Executive Officer, this achievement exceeded the high end of their guide, demonstrating a strong finish to the year.
"We closed out 2024 with healthy results," said Plant on the company's conference call. "Revenues of record as well as EBITDA, EBITDA margin and earnings per share. Fourth quarter earnings per share were $0.74, an increase of 40% over the prior year, and that concludes a year at $2.69 and a good year as we put it."
The company's financial performance was driven by strong growth in commercial aerospace, defense aerospace, and industrial markets. Commercial aerospace revenue grew 13% in the fourth quarter and 20% for the full year, with all three aerospace segments contributing to this increase. Defense aerospace revenue accelerated in the fourth quarter, growing 22%, while industrial and other markets were up 11% in the quarter and 9% for the year.
Ken Giacobbe, Executive Vice President and Chief Financial Officer, highlighted the company's robust spares growth, which was up approximately 25% for the full year to $1.28 billion. Spares revenue also accelerated in the second half of the year, representing 17% of total revenue in 2024.
The company's free cash flow conversion of net income was an impressive 88%, with all $977 million generated in 2024 deployed to share repurchases, debt reduction, and dividends. In fact, Howmet repurchased $500 million of common stock, reduced debt by $365 million, and paid $109 million in dividends during the year.
"Regarding dividends, we recently announced a 25% increase in the quarterly common stock dividend, which will be paid later this month," added Plant. "The balance sheet continues to strengthen with leverage of net debt-to-EBITDA improving to 1.4x."
Howmet's financial performance and strong free cash flow generation have provided a solid foundation for growth in 2025. The company's confidence in its future prospects was evident in the comments made by Plant, who highlighted the improvement in profitability of the Structures segment and the positive outlook for the year ahead.
