Howmet Aerospace Inc. (HWM) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

August 1, 2023 10:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Howmet Aerospace Second Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Paul Luther, Vice President, Investor Relations. Please go ahead.

Paul Luther

Thank you, Kate. Good morning and welcome to the Howmet Aerospace second quarter 2023 results conference call. I’m joined by John Plant, Executive Chairman and Chief Executive Officer; and Ken Giacobbe, Executive Vice President and Chief Financial Officer. After comments by John and Ken, we will have a question-and-answer session.

I would like to remind you that today’s discussion will contain forward-looking statements relating to future events and expectations. You can find factors that could cause the company’s actual results to differ materially from these projections listed in today’s presentation and earnings press release, and in our most recent SEC filings.

In today’s presentation, references to EBITDA and EPS mean adjusted EBITDA excluding special items and adjusted EPS excluding special items. These measures are among the non-GAAP financial measures that we’ve included in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today’s press release and in the appendix in today’s presentation.

With that, I’d like to turn the call over to John.

John Plant

Thanks, PT, and good morning, everyone. Q2 was another strong quarter for Howmet. Revenues were up 18% year-over-year and 3% sequentially, albeit, Q2 is traditionally a stronger quarter seasonally than Q1 due to more effective production and sales days.

Commercial aerospace increased by 23% year-over-year and continues to be the highlight of the quarter and reflects some of the scheduled increases for the anticipated Boeing 737 build rates, which are slated to increase very soon.

Defense sales were also strong at plus 17%. EBITDA was up 16% year-over-year and up sequentially. Earnings per share increased to $0.44 per share and exceeded the high end of guidance. This was an increase of 26% year-over-year. The cash balance was a healthy $536 million, and free cash flow was strong at $188 million, which started at consecutive quarters of cash generation. $100 million of cash flow was used to buy back shares at an average price of $45 per share.