Ken Giacobbe
Executive Vice President and Chief Financial Officer at Howmet Aerospace
Thank you, John. Good morning, everyone.
Let's move to Slide 5. So, market growth continued to be healthy in the third quarter, with total revenue up 11% year-over-year, building on the first-half revenue growth of 14%. Commercial aerospace growth remained strong despite our decision to restrict supply to Boeing due to the strike. Commercial aerospace revenue was up 17%, which built on the 25% commercial aerospace growth in the first-half. Defense aerospace was also strong, up 15%, driven by fighter programs and fighter engine spares demand. As expected, the commercial transportation market weakened, with revenue down 12%, led by the slowdown in Europe and, to a lesser extent, North America. Finally, the industrial and other markets were up a healthy 17%, driven by oil and gas up 26%, IGT up 20% and general industrial up 5%.
In summary, continued strong performance in commercial aerospace, defense aerospace and industrial, partially offset by commercial transportation.
Now, let's move to Slide 6, starting with the P&L. For the third consecutive quarter, EBITDA, EBITDA margin and earnings per share were all records and exceeded the high-end of guidance. On a year-over-year basis, revenue was up 11% and EBITDA outpaced revenue growth by being up 27% as total headcount remained flat in the quarter, despite adding approximately 235 headcount in the Engines segment. Incremental flow through of revenue to EBITDA was a healthy 59%. Moreover, the team delivered records for both EBITDA margin at 26.5% and earnings per share of $0.71, which was up a healthy 54% year-over-year.
Now, let's cover the balance sheet and cash flow. The balance sheet continues to strengthen. Cash at the end of the quarter was $475 million and free cash flow was a record for Q3 at $162 million. Year-to-date, free cash flow is approximately $600 million. Net debt-to-EBITDA continues to improve and was at a record low of 1.6 times. All long-term debt is unsecured and at fixed rates. Howmet's improved financial leverage and strong cash generation were reflected in Moody's two-notch rating upgrade to Baa1. Additionally, Fitch upgraded Howmet's outlook to positive. Liquidity remains strong with a healthy cash balance and a $1 billion undrawn revolver, complemented by the flexibility of a $1 billion commercial paper program.
Regarding capital deployment, we deployed approximately $416 million of cash in the quarter to debt paydown, common stock repurchases and quarterly dividends. For the quarter, we reduced debt by approximately $282 million through the following three actions. First, we redeemed the remaining $205 million balance of the 2024 bonds with cash on hand. Payment was at par. Second, we issued $500 million of new bonds due in October 2031. The fixed interest rate is 3.72%. Third, we redeemed the remaining $577 million balance on the May 2025 bonds. We used $77 million of cash on hand plus the proceeds from the October 2031 bond issuance, which has a substantially lower fixed interest rate. All combined debt actions year-to-date through the third quarter 2024 will reduce annualized interest expense by approximately $33 million. The Company's next debt maturity is in November of 2026.
Moving to share repurchases. In the third quarter, we repurchased $100 million of common stock at an average price of approximately $94 per share. Year-to-date through September, we repurchased $310 million of common stock at an average price of approximately $77 per share. Q3 was the 14th consecutive quarter of common stock repurchases. The average diluted share count improved to a record low Q3 exit rate of 409 million shares. Moreover, in October of 2024, the Company repurchased an additional $90 million of common stock at an average price of approximately $103 per share. Year-to-date through October 31, the Company has repurchased $400 million of common stock at an average price of approximately $81 per share, retiring approximately 4.9 million shares. Remaining authorization from the Board of Directors for share repurchases is approximately $2.3 billion as of the end of October.
Finally, we continue to be confident in free cash flow. In the third quarter, we paid $34 million in dividends as we increased the common stock dividend 60% from $0.05 per share to $0.08 per share.
Now, let's move to Slide 7 to cover the segment results for the third quarter. Engine Products delivered another record performance. Revenue increased 18% year-over-year to $945 million. Commercial aerospace was up 20% and defense aerospace was up 15%, driven by engines spares growth. Oil and gas was up 26% and IGT was up 20%. Demand continues to be strong across all of our engines markets, with strong engine spares volumes, which are expected to reach a record with $1.25 billion of revenue in 2024. EBITDA outpaced revenue growth with an increase of 40% year-over-year to a record $307 million. EBITDA margin increased 510 basis points year-over-year to a record 32.5%, while absorbing approximately 235 net new employees in the quarter to support growth. The Engines team once again delivered a record quarter for revenue, EBITDA and EBITDA margin.
Now, let's move to Slide 8. Fastening Systems also had another strong quarter. Revenue increased 13% year-over-year to $392 million. Commercial aerospace was 17% higher, including the impact of the wide-body recovery and the Boeing strike. General industrial was up 26%, defense aerospace was up 5% and commercial transportation, which represents 16% of fasteners revenue, was down 3%. Year-over-year revenue outpaced revenue growth -- excuse me, year-over-year EBITDA outpaced revenue growth with an increase of 34% to $102 million. EBITDA margin increased 420 basis points year-over-year to a healthy 26%. The team continues to expand margins through commercial and operational performance.
Now, let's move to Slide 9. Engineered Structures performance continues to improve. Revenue increased 11% year-over-year to $253 million. Commercial aerospace was up 11% and defense aerospace was up 27% year-over-year, driven primarily by the F-35 program. Year-over-year segment EBITDA outpaced revenue growth and was up 27% to $38 million. EBITDA margin increased 180 basis points to 15%. Sequentially, revenue decreased 8% as we continue to optimize the Structures' manufacturing footprint and rationalize the product mix to maximize profitability. The team continues to make progress and we expect continued improvements heading into 2025.
Finally, let's move to Slide 10. Forged Wheels revenue was down 14% year-over-year, as the long expected slowdown takes hold of the commercial transportation market. EBITDA decreased 17% as the team flexed cost to minimize the margin decline. EBITDA margin continues to be healthy at 26.1%.
Lastly, before turning it back over to John, I wanted to highlight a special item on Page 18 in the appendix. In the third quarter, we completed a study that resulted in a favorable R&D tax credit of approximately $44 million, which was approved by the IRS. The credit was for prior period expenses associated with R&D investments. The favorable credit was excluded from our results and was noted as a special item. The favorable R&D tax credit reflects Howmet's continued investment in innovation and technology.
Now, let me turn it back over to John.