Howmet Aerospace stock spiked Tuesday, to break out as the Boeing supplier reported strong earnings and guidance, as well a big hikes to its dividend and buyback program.
Howmet Aerospace reported a 52% increase in earnings to 67 cents per share adjusted, clearing FactSet views of 60 cents. Revenue rose 14% to $1.88 billion, which topped analyst estimates of $1.834 billion.
The engine components and metal parts provider posted a 27% jump in commercial aerospace revenue, driven by strong travel demand and an aging aircraft fleet. Howmet Aerospace CEO John Plant noted that these two factors have led to "an extremely high" backlog at aircraft original equipment manufacturers (OEMs), which has hindered the manufacturers' ability to deliver jets on a consistent basis.
Defense aerospace revenue increased 11% for the quarter, while commercial transportation revenue slid 4%.
In addition to Boeing, Howmet Aerospace is a supplier to RTX unit Pratt & Whitney as well as the F-35 Lightning II from Lockheed Martin.
Howmet Hikes Outlook, Dividend
Howmet Aerospace lifted its 2024 adjusted earnings per share guidance to $2.53-$2.57 from $2.31-$2.39. The company now sees 2024 revenue between $7.4 billion and $7.48 billion, up from the prior guidance of $7.225 billion to $7.375 billion.
The new outlook topped FactSet earnings forecasts of $2.39 per share on $7.32 billion in revenue.
Howmet also raised the midpoint of its 2024 free cash flow guidance by $70 million, to $870 million.
For the third quarter, Howmet Aerospace sees EPS of 63-65 cents on revenue of $1.845 billion-$1.865 billion. That's ahead o analyst views of 60 cents EPS and $1.81 billion in sales.
The company bought back $60 million shares of stock during the quarter. On Tuesday, Howmet increased its stock repurchase plan by $2 billion to $2.487 billion.
Howmet Aerospace also hiked its quarterly dividend by 60% to 8 cents per share. The new dividend for Q3 will be paid out on Aug. 26 to shareholders on record as of Aug. 9.
Howmet Aerospace Stock
HWM stock bolted 13.2% Tuesday to gap up above an 85.52 buy point for a 10-week cup base.
The entry matches Howmet's record high from May 28.
Howmet Aerospace stock has rallied 72% so far this year.
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