Howmet Aerospace Inc. HWM is scheduled to release fourth-quarter 2022 results on Feb 14, before market open.
The Zacks Consensus Estimate for fourth-quarter earnings has remained steady in the past 60 days. The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters, while matching estimates in one.
Let’s see how things have shaped up for Howmet this earnings season.
Howmet Aerospace Inc. Price and EPS Surprise
Howmet Aerospace Inc. price-eps-surprise | Howmet Aerospace Inc. Quote
Factors to Note
Howmet’s fourth-quarter performance is expected to have benefited from continued recovery in the commercial aerospace end market, owing to a recovery in narrow-body. Pricing actions are expected to have driven its top line.
The Engine Products and Fastening Systems segments are expected to reflect higher revenues on the back of strength in the commercial aerospace market. The Zacks Consensus Estimate for Engine Products revenues indicates a 14.8% jump from the year-ago reported number. The same for Fastening Systems also suggests a 14.8% rise.
Strength in commercial transportation due to higher aluminum prices and volumes is likely to have buoyed the Forged Wheels segment’s performance. The Zacks Consensus Estimate for Forged Wheels revenues hints at a 15.4% increase from the fourth quarter of 2021 reported figure.
For the fourth quarter, Howmet expects revenues of $1.45-$1.5 billion. The mid-point of the guided range — $1.47 billion — is higher than $1.285 billion reported in the year-ago period. Adjusted earnings are expected to be 37-39 per share for the to-be-reported quarter. The mid-point of the guided range — 38 cents — is higher than 30 cents reported in the year-ago period.
However, weakness in the defense aerospace market and a decline in Boeing 787 production is likely to have weighed on the Engineered Structures segment’s performance.
HWM’s performance is likely to have been hurt by supply-chain disruptions, which are affecting volumes and limiting commercial truck production in the commercial transportation end market.
Unfavorable foreign currency movements might have impacted the top line. High raw material costs are expected to have dented the bottom-line performance in the soon-to-be-reported quarter.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for Howmet this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Howmet has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at 38 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Howmet currently carries a Zacks Rank #3.
Highlights of Q3 Earnings
Howmet third-quarter 2022 adjusted earnings of 36 cents per share matched the Zacks Consensus Estimate. The bottom line improved 33.3% year over year. Total revenues of $1,433 million missed the Zacks Consensus Estimate of $1,438 million. The top line increased 11.7% from the year-ago quarter, backed by pricing actions and an improvement in the commercial aerospace market.
Stocks to Consider
Here are some companies, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.
Allegion plc ALLE has an Earnings ESP of +4.19% and a Zacks Rank #2. The company is set to release fourth-quarter results on Feb 22.
The Zacks Consensus Estimate for Allegion’s fourth-quarter earnings has been revised downward by 2.8% in the past 60 days. However, the company pulled off a trailing four-quarter earnings surprise of 8.8%, on average.
AptarGroup ATR has an Earnings ESP of +3.28% and a Zacks Rank #3. The company is scheduled to release fourth-quarter 2022 results on Feb 16.
The Zacks Consensus Estimate for AptarGroup’s fourth-quarter earnings has been revised upward by a penny in the past 60 days. The company pulled off a trailing four-quarter earnings surprise of 0.8%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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