Howmet Aerospace expects its earnings to fall further in Q3 2020 to its lowest point for the year as the commercial aerospace and transportation industries continue to suffer the impact of the COVID-19 pandemic.
John Plant, Howmet’s executive chairman and co-chief executive officer, said in the company’s Q2 2020 earnings report on Thursday that significant uncertainties around COVID-19, changes in aircraft build rates, and corrections in customer inventory could affect Howmet’s earnings through the rest of the year.
In Q2 2020 Howmet’s consolidated revenue declined by 31pc to $1.25bn compared with $1.81bn in the same period last year. Apart from the pandemic, and declines in commercial aerospace, Howmet’s sales declines were driven by the disruptions in the production of the Boeing 737Max aircraft, a key customer for Howmet’s products. However robust sales of defense products shored up the company’s revenue during the quarter.
Howmet’s Engine Products division witnessed a 30pc decline in sales to $585mn in Q2 2020 from $835mn during the same period last year. Its Fastening Systems sales fell by 18pc to $326mn in the second quarter from $399mn during the same period last year, while Engineered Structures sales decreased by 31pc to $229mn from $331mn. The company’s Forged Wheels business segment reported the steepest revenue declines, falling by 56pc to $113mn in Q2 2020 from $257mn in Q2 2019.
The US-based aerospace parts provider, which completed its separation from Arconic in April, reported a loss from continuing operations of $84mn in Q2 2020 compared with a loss from continuing operations of $136mn in the same quarter last year, due to the separation.