HWM Earning Date, Transcript Summary & Report

Earnings Per Share Surge: Fourth quarter earnings per share were $0.74, a 40% increase over the prior year, concluding the year at $2.69, which represents a 46% increase year over year and is 25% higher than the initial guidance for 2024.

Record Free Cash Flow: Free cash flow for the year reached a record $977 million, representing an 88% conversion of net income, with all cash deployed to share repurchases, debt reduction, and dividends.

Stock Repurchase and Debt Reduction: During 2024, Hammitt repurchased $500 million of common stock, including $190 million completed in Q4, and reduced debt by $365 million, while also paying $109 million in dividends, which was a 53% increase year over year.

EBITDA Margin Expansion: Revenue for the full year was up 12%, with EBITDA growth outpacing revenue growth at 27%, resulting in a full year EBITDA margin increase of 310 basis points to 25.8%.

Spares Revenue Surge: Spares revenue increased approximately 25% for the year to $1.28 billion, representing 17% of total revenue, with strong growth expected to continue into 2025.

Commercial Transportation Decline: Commercial transportation revenues decreased by 12% in Q4 and 7% for the full year, indicating significant challenges in this segment.

Forged Wheels Revenue Decline: Forged wheels revenue declined by 12% year over year in Q4, with a full year revenue drop of 8%, reflecting ongoing market weakness.

Engine Segment Margin Decline: Despite overall revenue growth, the Engine segment experienced a slight margin decline of 150 basis points quarter over quarter, raising concerns about future profitability.

Debt Pay Down Outlook: The company anticipates a muted debt pay down in 2025 compared to 2024, suggesting a potential increase in leverage and financial risk.

Working Capital Strain: Working capital is expected to burn approximately $180 million in 2025, indicating a strain on cash flow management amidst rising operational costs.