Today witnessed a significant surge in Howmet Aerospace's share price, soaring over 12% upward.
On an exceptionally vigorous trading day, Howmet Aerospace (HWM 1.35%) stood out favorably, even by stock market's aggressive standards on Wednesday. The aerospace company reported a substantial earnings surplus, triggering a buying spree among investors. Consequently, the stock soared by more than 12%, leaving the S&P 500 (^GSPC 1.09%), which managed a solid 2.5% increase, in its wake.
Triumphant third-quarter profit report
Howmet disclosed its third-quarter financials prior to market opening, setting the stage for investor enthusiasm. The quarter's revenue reached $1.84 billion, marking a significant year-on-year rise of 11%. Analysts, however, projected a slightly higher figure of $1.85 billion.
The financial disparity unfolded particularly on the profitability front. Based on generally accepted accounting principles (GAAP), Howmet generated a net income of $332 million, translating to $0.81 in earnings per share (EPS). In contrast, the company's 2023 third-quarter net income amounted to only $188 million. Unsurprisingly, this crushed analysts' average estimate of $0.65 per share.
Remarkably, Howmet achieved these double-digit improvements despite facing a strike at a key client, Boeing. The company also noted that its European business segment, focusing on forged wheels, grappled with "significantly weaker" market conditions.
Revised earnings projections exceed expectations
In its earnings announcement, Howmet updated its forecast for both the fourth quarter and the entirety of 2024. For the year, revenue is projected to range between $7.39 billion and $7.43 billion. This slightly falls short of the average analyst prediction of $7.45 billion. However, the company anticipates net income per share to hit $2.65 to $2.67, comfortably surpassing the consensus estimate of $2.59.
Following the settlement of the Boeing strike, business prospects for Howmet appear promising, although Boeing has encountered challenges beyond labor disputes lately.
Investors showed interest in money-making opportunities after Howmet's triumphant third-quarter profit report, leading to significant investments in the aerospace company's stocks. The company's impressive earnings surplus, despite facing challenges such as Boeing's strike and weaker market conditions in Europe, attracted finance-focused individuals seeking to maximize their returns.
