John C. Plant
Chief Executive Officer at Howmet Aerospace
Thanks, Ken. Let's move to Slide #11. Moving to ESG. I'd encourage you to read our sustainability report found at howmet.com in the Investors section. Howmet is committed to improving our environmental footprint, and actions taken in 2021 have reduced Howmet's greenhouse gas emissions, energy consumption, wastewater use and landfill waste. We have funded approximately 100 projects, which are expected to reduce Howmet's Scope one and Scope two greenhouse gas emissions by 21.5% by 2024 compared to our 2019 baseline. Howmet is also committed to a safe workplace while fostering a diverse, equitable and inclusive work environment where all of our employees can thrive. Our safety record is 5 times better than the industry average. Moreover, Howmet was named one of the best places to work for LGBT equality by the Human Rights Campaign Foundation. Regarding governance, the company was recognized by 50/50 Women on Boards for having 40% of our Board of Directors made up of women. Lastly, 81% of our key suppliers have sustainability programs considered to be leading or active. Howmet's portfolio at advanced energy-efficient projects span several markets and contribute to substantial reductions in emissions. We will discuss Howmet's IP-rich portfolio and several of our differentiated products at Howmet's Technology Day on Monday, May 23, in New York.
Let's move to Slide #12 and our second quarter guidance. The revenue outlook continues to show improvement. Let me start with commercial aerospace. Airline load factors show improvements in North America and Europe. China is lagging but is expected to show improvements later in 2022. This is leading to solid narrow body build projections for the Airbus A320 and 321 and the Airbus the 321 timesLR family of aircraft. Moreover, there is a notable order input for the Airbus 220 aircraft, for which Howmet has a very healthy shipset value roughly in line with the A320. We also expect to see further value content improvements later in 2022 when we begin to transition to the improved Pratt & Whitney geared turbofan engine having both increased thrust and fuel efficiency. The volumes for the Boeing 737 MAX continued to grow with the rate improving to 31 per month compared to the exit rate in 2021 of 17 per month. As the rate moves towards this 31 per month range, the remaining inventory overhang will be extinguished.
We also note by the middle of 2023, the Airbus A320, 321 rate of 65 per month will require Howmet to be at this rate as we transition into 2023, which is another pickup from the mid-50s rate in the middle of 2022. Revenue for the defense sector is solid, and after destocking of the structural bulkheads for the F-35, driven by lower-than-planned Lockheed build in 2020 and 2021, we expect growth will resume in 2023. We note the selection of the F-35 programs for the Air Forces in Germany, Switzerland, Canada and Finland in recent months, which is going to drive future volume projections. Moving to industrial and other markets. Revenue for IGT remain strong, notably with average shipset values increasing with the larger, more sophisticated turbine blades for the aging J class turbines. One good aspect of the oil price increase is the expectation for Howmet -- that this will show growth later in the year. Class eight truck and trailer manufacturing are also expected to begin to grow as the supply chain constraints begin to ease especially in the second half, but in fact, beginning in the second quarter.
Specifically to address numbers for Q2 and the year. Revenue is expected in Q2 to be $1.37 billion, plus or minus $20 million; EBITDA of $310 million, plus or minus $8 million; EBITDA margin of 22.6%, plus 30 basis points, minus 20 basis points; and earnings per share of $0.32 plus or minus $0.01. For the year, revenue of $5.64 billion, plus or minus $80 million; EBITDA of $1.3 billion, plus or minus $35 million; EBITDA margin of 23%, plus 30 basis points, minus 20. Earnings per share are expected to be in the range of $1.39, plus or minus $0.06; and free cash flow of $625 million, plus or minus $50 million. Implicit in these numbers is capital expenditure of approximately $235 million and an improved tax rate of approximately 24.5%. In order to provide color on the near term, revenues reflect the reduction of the Boeing 787 volumes and also increases for commodity inflation recoveries. There's a similar impact on EBITDA and EBITDA margin. You'll note that the guidance leads to another very solid year for Howmet with growth and profit improvement and is setting the company up well to address the further growth expected in 2023 across all of our markets and especially the start of growth in the wide-body market. Also, as Ken mentioned, notably, we are now recruiting in three of our four segments.
The first quarter -- so I'll move to Slide 13. The first quarter was a healthy start to the year. We delivered strong results that met or exceeded guidance. Year-over-year revenue grew 10% and earnings per share grew 41%. Free cash flow was essentially breakeven after approximately $85 million increase in inventory to support the aerospace recovery plus the commensurate increase in AR as a result of the increased sales. Liquidity is strong, and cash generation is expected to be very positive in the remaining quarters of 2022. The Q2 outlook for revenue is expected to be approximately $45 million higher than in Q1, with margins of approximately 22.5% to 23%, setting a platform for a healthy '22. Full year adjusted earnings per share guidance has also been increased. And now we can move to Q&A.