Howmet Aerospace Reports Second Quarter 2025 Results

Q3 2025 Guidance

FY 2025 Guidance

Low

Baseline

High

Low

Baseline

High

Revenue

$2.020B

$2.030B

$2.040B

$8.080B

$8.130B

$8.180B

Adj. EBITDA^*1

$575M

$580M

$585M

$2.300B

$2.320B

$2.340B

Adj. EBITDA Margin^*1

28.5 %

28.6 %

28.7 %

28.5 %

28.5 %

28.6 %

Adj. Earnings per Share^*1

$0.89

$0.90

$0.91

$3.56

$3.60

$3.64

$1.175B

$1.225B

_____________________________

* Excluding special items

¹ Reconciliations of the forward-looking non-GAAP measures to the most directly comparable GAAP measures, as well as the directly comparable GAAP measures, are not available without unreasonable efforts due to the variability and complexity of the charges and other components excluded from the non-GAAP measures – for further detail, see "2025 Guidance" below.

________________________

* Excluding special items

Engine Products

2Q24

3Q24

4Q24

1Q25

2Q25

(in U.S. dollar millions)

Third-party sales

$ 933

$ 945

$ 972

$ 996

$1,056

Inter-segment sales

$ 1

$ 3

$ 1

$ 2

$ 2

Provision for depreciation and amortization

$ 33

$ 34

$ 39

$ 34

$ 35

Segment Adjusted EBITDA

$ 292

$ 307

$ 302

$ 325

$ 349

Segment Adjusted EBITDA Margin

31.3 %

32.5 %

31.1 %

32.6 %

33.0 %

Restructuring and other (credits) charges

$ 1

$ 1

$ —

$ —

Capital expenditures

$ 33

$ 55

$ 76

$ 86

$ 75

Fastening Systems

2Q24

3Q24

4Q24

1Q25

2Q25

(in U.S. dollar millions)

Third-party sales

$ 394

$ 392

$ 401

$ 412

$431

Inter-segment sales

$  —

$  —

$    1

$    —

$  —

Provision for depreciation and amortization

$  13

$  12

$  11

$  12

$ 12

Segment Adjusted EBITDA

$ 101

$ 102

$ 111

$ 127

$ 126

Segment Adjusted EBITDA Margin

25.6 %

26.0 %

27.7 %

30.8 %

29.2 %

Restructuring and other charges

$ 2

$ 1

$ 2

$  —

$ 1

Capital expenditures

$ 5

$ 5

$ 9

$ 10

$ 9

Engineered Structures

2Q24

3Q24

4Q24

1Q25

2Q25

(in U.S. dollar millions)

Third-party sales

$ 275

$ 253

$ 275

$ 282

$290

Inter-segment sales

$ 3

$ 3

$ 3

$ 3

$ 3

Provision for depreciation and amortization

$ 11

$ 10

$ 10

$ 12

$ 10

Segment Adjusted EBITDA

$ 40

$ 38

$ 51

$ 60

$ 62

Segment Adjusted EBITDA Margin

14.5 %

15.0 %

18.5 %

21.3 %

21.4 %

Restructuring and other charges (credits)

$ 18

$ (3)

$ (3)

$ (4)

$  —

Capital expenditures

$  5

$  5

$  4

$  5

$ 6

Forged Wheels

2Q24

3Q24

4Q24

1Q25

2Q25

(in U.S. dollar millions)

Third-party sales

$ 278

$ 245

$ 243

$ 252

$276

Provision for depreciation and amortization

$ 10

$ 10

$ 12

$ 10

$ 10

Segment Adjusted EBITDA

$ 75

$ 64

$ 66

$ 68

$ 76

Segment Adjusted EBITDA Margin

27.0 %

26.1 %

27.2 %

27.0 %

27.5 %

Restructuring and other charges (credits)

$ 1

$ —

$ —

$ —

Capital expenditures

$   9

$ 14

$ 10

$ 15

$ 8

Q3 2025 Guidance

FY 2025 Guidance

Low

Baseline

High

Low

Baseline

High

Revenue

$2.020B

$2.030B

$2.040B

$8.080B

$8.130B

$8.180B

Baseline Change

+$100M

Adj. EBITDA^*1

$575M

$580M

$585M

$2.300B

$2.320B

$2.340B

Adj. EBITDA Margin^*1

28.5 %

28.6 %

28.7 %

28.5 %

28.5 %

28.6 %

Baseline Change

Baseline Change

+$70M

+ 50 bps

Adj. Earnings per Share^*1

$0.89

$0.90

$0.91

$3.56

$3.60

$3.64

Baseline Change

+$0.20

Free Cash Flow¹

$1.175B

$1.225B

$1.275B

Baseline Change

+$75M

*  Excluding Special Items

¹  Reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as the directly comparable GAAP measures, are not available without unreasonable efforts due to the variability and complexity of the charges and other components excluded from the non-GAAP measures, such as gains or losses on sales of assets, taxes, and any future restructuring or impairment charges. In addition, there is inherent variability already included in the GAAP measures, including, but not limited to, price/mix and volume. Howmet Aerospace believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

Howmet Aerospace Inc. and subsidiaries

Statement of Consolidated Operations (unaudited)

(in U.S. dollar millions, except per-share and share amounts)

‌

Quarter ended

June 30, 2025

March 31, 2025

June 30, 2024

Sales

$                     2,053

$                     1,942

$                     1,880

 ‌

Cost of goods sold (exclusive of expenses below)

1,365

1,290

1,287

Selling, general administrative, and other expenses

89

85

97

Research and development expenses

9

8

7

Provision for depreciation and amortization

69

69

69

Restructuring and other (credits) charges

—

(4)

22

Operating income

521

494

398

 ‌

Interest expense, net

38

39

49

Other expense, net

14

9

15

 ‌

Income before income taxes

469

446

334

Provision for income taxes

62

102

68

Net income

$                        407

$                        344

$                        266

 ‌

Amounts Attributable to Howmet Aerospace Common Shareholders:

Earnings per share - basic⁽¹⁾:

 Net income per share

$                       1.01

$                       0.85

$                       0.65

 Average number of shares⁽²⁾⁽³⁾

404

405

408

 ‌

Earnings per share - diluted⁽¹⁾:

 Net income per share

$                       1.00

$                       0.84

$                       0.65

 Average number of shares⁽²⁾⁽³⁾

406

407

411

 ‌

Common stock outstanding at the end of the period

404

404

408

‌

⁽¹⁾

In order to calculate both basic and diluted earnings per share, preferred stock dividends declared of less than $1 for the quarters presented need to be subtracted from Net income.

‌

⁽²⁾

For the quarters presented, the difference between the diluted average number of shares and the basic average number of shares relates to share equivalents associated with outstanding restricted stock unit awards and employee stock options.

‌

⁽³⁾

As average shares outstanding are used in the calculation of both basic and diluted earnings per share, the full impact of share repurchases is not fully realized in earnings per share ("EPS") in the period of repurchase since share repurchases may occur at varying points during a period.

Howmet Aerospace Inc. and subsidiaries

Consolidated Balance Sheet (unaudited)

(in U.S. dollar millions)

‌

 ‌

June 30, 2025

December 31, 2024

Assets

Current assets:

Cash and cash equivalents

$                            545

$                            564

Receivables from customers, less allowances of $— in both 2025 and 2024

888

689

Other receivables

14

20

Inventories

1,964

1,840

Prepaid expenses and other current assets

283

249

 Total current assets

3,694

3,362

Properties, plants, and equipment, net

2,526

2,386

Goodwill

4,065

4,010

Deferred income taxes

31

35

Intangibles, net

467

475

Other noncurrent assets

263

251

 Total assets

$                      11,046

$                      10,519

 ‌

Liabilities

Current liabilities:

Accounts payable, trade

$                         1,028

$                            948

Accrued compensation and retirement costs

263

305

Taxes, including income taxes

64

60

Accrued interest payable

59

59

Other current liabilities

181

171

Long-term debt due within one year

5

6

 Total current liabilities

1,600

1,549

Long-term debt

3,253

3,309

Accrued pension benefits

613

625

Accrued other postretirement benefits

52

54

Other noncurrent liabilities and deferred credits

486

428

 Total liabilities

6,004

5,965

 ‌

Equity

Howmet Aerospace shareholders' equity:

Preferred stock

55

55

Common stock

404

405

Additional capital

2,898

3,206

Retained earnings

3,434

2,766

Accumulated other comprehensive loss

(1,749)

(1,878)

 Total equity

5,042

4,554

 Total liabilities and equity

$                      11,046

$                      10,519

Howmet Aerospace Inc. and subsidiaries

Statement of Consolidated Cash Flows (unaudited)

(in U.S. dollar millions)

‌

Six months ended June 30,

 ‌

Operating activities

Net income

$                     751

$                     509

Adjustments to reconcile net income to cash provided from operations:

Depreciation and amortization

138

136

Deferred income taxes

12

67

Restructuring and other (credits) charges

(4)

22

Net realized and unrealized losses

11

13

Net periodic pension cost

21

20

Stock-based compensation

39

38

Other

2

7

Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and foreign currency translation adjustments:

Increase in receivables

(170)

(100)

Increase in inventories

(81)

(109)

Decrease in prepaid expenses and other current assets

6

5

Increase in accounts payable, trade

74

6

Decrease in accrued expenses

(47)

(17)

(Decrease) increase in taxes, including income taxes

(20)

13

Pension contributions

(15)

(17)

Increase in noncurrent assets

(2)

(7)

Decrease in noncurrent liabilities

(16)

(12)

Cash provided from operations

699

574

Financing Activities

Repurchases and payments on debt

(77)

(23)

Repurchases of common stock

(300)

(210)

Proceeds from exercise of employee stock options

1

6

Dividends paid to shareholders

(83)

(42)

Taxes paid for net share settlement of equity awards

(44)

(32)

Other

(3)

—

Cash used for financing activities

(506)

(301)

Investing Activities

Capital expenditures

(221)

(137)

Proceeds from the sale of assets and businesses 

8

8

Other

1

—

Cash used for investing activities

(212)

(129)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

—

(2)

Net change in cash, cash equivalents and restricted cash        

(19)

142

Cash, cash equivalents and restricted cash at beginning of period

565

610

Cash, cash equivalents and restricted cash at end of period

$                     546

$                     752

Howmet Aerospace Inc. and subsidiaries

Segment Information (unaudited)     

(in U.S. dollar millions)

‌

1Q24

2Q24

3Q24

4Q24

2024

1Q25

2Q25

Engine Products

Third-party sales

$ 885

$ 933

$ 945

$ 972

$  3,735

$ 996

$  1,056

Inter-segment sales

$     2

$     1

$     3

$     1

$         7

$     2

$     2

Provision for depreciation and amortization

$   33

$   33

$   34

$   39

$     139

$   34

$   35

Segment Adjusted EBITDA

$ 249

$ 292

$ 307

$ 302

$  1,150

$ 325

$ 349

Segment Adjusted EBITDA Margin

28.1 %

31.3 %

32.5 %

31.1 %

30.8 %

32.6 %

33.0 %

Restructuring and other (credits) charges

$   —

$   (1)

$     1

$     1

$         1

$   —

$   —

Capital expenditures

$   55

$   33

$   55

$   76

$     219

$   86

$   75

 ‌

Fastening Systems

Third-party sales

$ 389

$ 394

$ 392

$ 401

$  1,576

$ 412

$ 431

Inter-segment sales

$   —

$   —

$   —

$     1

$         1

$   —

$   —

Provision for depreciation and amortization

$   11

$   13

$   12

$   11

$       47

$   12

$   12

Segment Adjusted EBITDA

$   92

$ 101

$ 102

$ 111

$     406

$ 127

$ 126

Segment Adjusted EBITDA Margin

23.7 %

25.6 %

26.0 %

27.7 %

25.8 %

30.8 %

29.2 %

Restructuring and other charges

$   —

$     2

$     1

$     2

$         5

$   —

$     1

Capital expenditures

$     7

$     5

$     5

$     9

$       26

$   10

$     9

 ‌

Engineered Structures

Third-party sales

$ 262

$ 275

$ 253

$ 275

$  1,065

$ 282

$ 290

Inter-segment sales

$     1

$     3

$     3

$     3

$       10

$     3

$     3

Provision for depreciation and amortization

$   11

$   11

$   10

$   10

$       42

$   12

$   10

Segment Adjusted EBITDA

$   37

$   40

$   38

$   51

$     166

$   60

$   62

Segment Adjusted EBITDA Margin

14.1 %

14.5 %

15.0 %

18.5 %

15.6 %

21.3 %

21.4 %

Restructuring and other charges (credits)

$   —

$   18

$   (3)

$   (3)

$       12

$   —

Capital expenditures

$     6

$     5

$     5

$     4

$       20

$     5

$     6

 ‌

Forged Wheels

Third-party sales

$ 288

$ 278

$ 245

$ 243

$  1,054

$ 252

$ 276

Provision for depreciation and amortization

$   10

$   10

$   10

$   12

$       42

$   10

$   10

Segment Adjusted EBITDA

$   82

$   75

$   64

$   66

$     287

$   68

$   76

Segment Adjusted EBITDA Margin

28.5 %

27.0 %

26.1 %

27.2 %

27.2 %

27.0 %

27.5 %

Restructuring and other charges (credits)

$   —

$     1

$   —

$   —

$         1

$   —

$   (1)

Capital expenditures

$   12

$     9

$   14

$   10

$       45

$   15

$     8

‌

Differences between the total segment and consolidated totals are in Corporate.

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited)

(in U.S. dollar millions)

‌

Reconciliation of Total Segment Adjusted EBITDA to Consolidated Income Before Income Taxes

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

Income before income taxes

$    303

$    334

$    354

$    392

$ 1,383

$    446

$    469

Loss on debt redemption

—

—

6

—

6

—

—

Interest expense, net

49

49

44

40

182

39

38

Other expense, net

17

15

17

13

62

9

14

Operating income

$    369

$    398

$    421

$    445

$ 1,633

$    494

$    521

Segment provision for depreciation and amortization

65

67

66

72

270

68

67

Unallocated amounts:

Restructuring and other charges (credits)

—

22

(1)

—

21

(4)

—

Corporate expense⁽¹⁾

26

21

25

13

85

22

25

Total Segment Adjusted EBITDA

$    460

$    508

$    511

$    530

$ 2,009

$    580

$    613

‌

Total Segment Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Total Segment Adjusted EBITDA provides additional information with respect to the Company's operating performance and the Company's ability to meet its financial obligations. The Total Segment Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. Howmet's definition of Total Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. Special items, including Restructuring and other charges (credits), are excluded from net margin and Segment Adjusted EBITDA. Differences between the total segment and consolidated totals are in Corporate.

⁽¹⁾ Pre-tax special items included in Corporate expense

1Q24

2Q24

3Q24

4Q24

1Q25

2Q25

Plant fire reimbursements, net

$       —

$       (6)

$       —

$     (12)

$     (18)

$       —

$       —

Costs (benefits) associated with closures, supply chain disruptions, and other items

1

—

(1)

1

1

1

(1)

Total Pre-tax special items included in Corporate expense

$         1

$       (6)

$       (1)

$     (11)

$       (1)

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited), continued

(in U.S. dollars millions)

‌

Reconciliation of Free cash flow

Quarter ended

Six months ended

1Q25

2Q25

2Q25

Cash provided from operations

$                         253

$                         446

$                        699

Capital expenditures

(119)

(102)

(221)

Free cash flow

$                         134

$                         344

$                        478

‌

The Accounts Receivable Securitization program remains unchanged at $250 outstanding.

‌

Free cash flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures (due to the fact that these expenditures are considered necessary to maintain and expand the Company's asset base and are expected to generate future cash flows from operations). It is important to note that Free cash flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure.

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited), continued

(in U.S. dollar millions, except per-share and share amounts)

‌

Reconciliation of Net income excluding Special items

Quarter ended

2Q24

1Q25

2Q25

Net income

$                  266

$                  344

$                  407

 ‌

Diluted earnings per share ("EPS")

$                 0.65

$                 0.84

$                 1.00

 ‌

Average number of diluted shares

411

407

406

 ‌

Special items:

 Restructuring and other charges (credits)⁽¹⁾

22

(4)

—

Plant fire reimbursements, net

(6)

—

—

Costs (benefits) associated with closures, supply chain disruptions, and other items

—

1

(1)

Subtotal: Pre-tax special items

16

(3)

(1)

Tax impact of Pre-tax special items⁽²⁾

—

1

—

Subtotal

16

(2)

(1)

 ‌

Discrete and other tax special items⁽³⁾

(6)

9

(35)

Total: After-tax special items

10

7

(36)

Net income excluding Special items

$                  276

$                  351

$                  371

 ‌

Diluted EPS excluding Special items

$                 0.67

$                 0.86

$                 0.91

‌‌

Net income excluding Special items and Diluted EPS excluding Special items are non-GAAP financial measures. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Restructuring and other charges (credits), Discrete tax items, and Other special items (collectively, "Special items"). There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Net income and Diluted EPS determined under GAAP as well as Net income excluding Special items and Diluted EPS excluding Special items. 

‌

⁽¹⁾

2Q24 includes non-cash Special items of a loss on sale of a small manufacturing facility in Engineered Structures $14 and other exit costs, including accelerated depreciation $1.

‌

⁽²⁾

The Tax impact of Pre-tax special items is based on the applicable statutory rates whereby the difference between such rates and the Company's consolidated estimated annual effective tax rate is itself a Special item. 

‌

⁽³⁾

Discrete tax items for each period included the following:

•

for 2Q24, an excess benefit for stock compensation ($5);

•

for 1Q25, a net charge related to the expiration of a tax holiday in China $6, a charge for a tax reserve established in Germany $2, and a net charge for other small items $1; and

•

for 2Q25, benefits related to U.S. accounting method changes for certain prior period transaction and other costs ($17), an excess benefit for stock compensation ($13), and a net benefit related to U.S. federal and state research and development ("R&D") credits claimed for prior years ($5).

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited), continued

(in U.S. dollar millions)

‌

Reconciliation of Operational tax rate

2Q25

Six months ended 2Q25

Effective
tax rate,
as
reported

Special
items⁽¹⁾⁽²⁾

Operational
tax rate, as
adjusted

Effective
tax rate,
as
reported

Special
items⁽¹⁾⁽²⁾

Operational
tax rate, as
adjusted

Income before income taxes

$      469

$            (1)

$          468

$     915

$            (4)

$          911

Provision for income taxes

$        62

$           35

$            97

$     164

$           25

$          189

Tax rate

13.2 %

20.7 %

17.9 %

20.7 %

‌‌

Operational tax rate is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both the Effective tax rate determined under GAAP as well as the Operational tax rate.

‌

⁽¹⁾

Pre-tax special items for 2Q25 included Costs (benefits) associated with closures, supply chain disruptions, and other items ($1). Pre-tax special items for the six months ended 2Q25 included Restructuring and other credits ($4).

‌

⁽²⁾

Tax Special items includes discrete tax items, the tax impact on Special items based on the applicable statutory rates, the difference between such rates and the Company's consolidated estimated annual effective tax rate and other tax related items. Discrete tax items for each period included the following:

•

for 2Q25, benefits related to U.S. accounting method changes for certain prior period transaction and other costs ($17), an excess benefit for stock compensation ($13), and a net benefit related to U.S. federal and state research and development ("R&D") credits claimed for prior years ($5); and

•

for the six months ended 2Q25, benefits related to U.S. accounting method changes for certain prior period transaction and other costs ($17), an excess benefit for stock compensation ($14), a net benefit related to U.S. federal and state research and development ("R&D") credits claimed for prior years ($5), a net charge related to the expiration of a tax holiday in China $6, a charge for a tax reserve established in Germany $2, and a net charge for other small items $2.

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited), continued

(in U.S. dollars millions)

‌‌‌

Reconciliation of Adjusted EBITDA and Adjusted EBITDA margin excluding Special items

Quarter ended

2Q24

1Q25

2Q25

Sales

$          1,880

$          1,942

$          2,053

Operating income

$             398

$             494

$             521

Operating income margin

21.2 %

25.4 %

25.4 %

 ‌‌‌

Net income

$             266

$             344

$             407

Add:

Provision for income taxes

$               68

$             102

$               62

Other expense, net

15

9

14

Interest expense, net

49

39

38

Restructuring and other charges (credits)

22

(4)

—

Provision for depreciation and amortization

69

69

69

Adjusted EBITDA

$             489

$             559

$             590

 ‌‌‌

Add:

Plant fire reimbursements, net

$               (6)

$               —

$               —

Costs (benefits) associated with closures, supply chain disruptions, and other items

—

1

(1)

Adjusted EBITDA excluding Special items

$            483

$            560

$            589

 ‌‌‌

Adjusted EBITDA margin excluding Special items

25.7 %

28.8 %

28.7 %

‌

Adjusted EBITDA, Adjusted EBITDA excluding Special items, and Adjusted EBITDA margin excluding Special items are non-GAAP financial measures. Management believes that these measures are meaningful to investors because they provide additional information with respect to the Company's operating performance and the Company's ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. The Company's definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold, Selling, general administrative, and other expenses, Research and development expenses, and Provision for depreciation and amortization. Special items, including Restructuring and other charges (credits), are excluded from Adjusted EBITDA.

Howmet Aerospace Inc. and subsidiaries

Calculation of Financial Measures (unaudited), continued

(in U.S. dollar millions)

‌

Reconciliation of Adjusted Operating Income Excluding Special Items and Adjusted Operating Income Margin Excluding Special Items

Quarter ended

2Q24

1Q25

2Q25

Sales

$      1,880

$      1,942

$      2,053

Operating income

$         398

$         494

$         521

Operating income margin

21.2 %

25.4 %

25.4 %

 ‌

Add:

Restructuring and other charges (credits)

$           22

$           (4)

$           —

Plant fire reimbursements, net

(6)

—

—

Costs (benefits) associated with closures, supply chain disruptions, and other items

—

1

Adjusted operating income excluding Special items

$         414

$         491

$         520

 ‌

Adjusted operating income margin excluding Special items

22.0 %

25.3 %

25.3 %

‌

Adjusted operating income excluding Special items and Adjusted operating income margin excluding Special items are non-GAAP financial measures. Special items, including Restructuring and other charges (credits), are excluded from Adjusted operating income. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Operating income determined under GAAP as well as Operating income excluding Special items.