PITTSURGH - Fastener revenue faltered at Howmet Aerospace (formerly Arconic), falling 31 percent to $271 million, largely due to COVID-19, inventory corrections by customers and the Boeing 737 MAX production delays.

Formerly known as Arconic, Howmet Aerospace launched in April 2020 when Arconic Inc. split into two standalone businesses – Howmet Aerospace Inc. and Arconic Corporation. Howmet Aerospace serves commercial transportation markets and military and commercial aerospace, providing components for trucks and planes such as wheels, castings, fixtures and specialized fastening systems.

Howmet says it holds the number one global position in aerospace fastening systems, and is the North American leader in commercial transportation fasteners. But its markets soured last quarter as customers corrected inventories of parts. An especial challenge for Howmet is “stranded inventory,” items made obsolete as OEM customers change designs or fail to meet sales targets, though the fastener part of its business has been less affected by that.

“We experienced [a] deeper revenue decline in fasteners as the third quarter revenue was down 31% driven by commercial aerospace and commercial transportation, both being down over 35%,” said Tolga Oal – Co-Chief Executive Officer of Howmet.

However, a weaker product mix, with less commercial aerospace and the expected delay in European cost reductions unfavorably impacted results. In the near term, we are furloughing employees to offset the delay in European cost reductions. European operations have been lagging in cutting costs, and so “In the near term, we are furloughing employees to offset the delay in European cost reductions,” Tolga said.

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