Howmet lifts financial forecasts, says Boeing trimming parts orders
Corrects to say Howmet is one of the industry's biggest suppliers, not the biggest suppliers, in paragraph 5
By Anandita Mehrotra
July 30 (Reuters) -Aircraft parts maker Howmet Aerospace HWM.N on Tuesday said customer Boeing Co BA.N was trimming orders for its best-selling programs, as the planemaker grapples with a safety crisis that has hit its production.
But parts orders continue to be above actual 737 and 787 production rates, Howmet CEO John Plant said on an analyst call.
Boeing, which is set to report second-quarter results on Wednesday, has been producing jets at a lower rate than its stated goal of 38 737 aircraft per month to plug quality holes, Reuters has reported. But the planemaker has been buying parts from its suppliers higher than its production rate.
Parts procurement has been in focus as some aerospace suppliers have been struggling to report consistent positive cash flows in the last two years.
However, Howmet, one ofthe industry's biggest suppliers, has produced strong results in recent quarters. On Tuesday, it lifted its annual forecasts, driven by strong demand for engine products and fastening systems.
The company also raised its buyback authorization by $2 billion and quarterly dividend by 60% to 8 cents per share.
Shares of the company, which also supplies parts to Airbus AIR.PA, jumped 12.8% to a record high of $93.44 after its second-quarter results also topped estimates.
Pennsylvania-based Howmet now expects 2024 revenue between $7.40 billion and $7.48 billion, up from its prior forecast of $7.23 billion to $7.38 billion.
Howmet, one of the main suppliers of aerospace castings, expects annual adjusted earnings between $2.53 and $2.57 per share, compared with previous forecast of $2.31 to $2.39.
"The portion of the supply chain where Howmet sits, particularly in advanced metal components for engines, continues to see strong demand; price and execution are supportive as well," said Seth Seifman, an analyst at J.P. Morgan.
On an adjusted basis, the company earned 67 cents per share for the quarter ended June 30.
Reporting by Anandita Mehrotra in Bengaluru; Editing by Anil D'Silva and Maju Samuel
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