Adient (ADNT) Q1 Earnings Miss Estimates, Guidance Revised

Adient ADNT delivered adjusted earnings per share (EPS) of 31 cents for the first quarter of fiscal 2024. Earnings fell from 34 cents recorded in the year-ago period and also missed the Zacks Consensus Estimate of 47 cents. In the reported quarter, the company generated net sales of $3.66 billion, which decreased 1% year over year and missed the Zacks Consensus Estimate of $3.72 billion.

Segmental Performance

Adient currently operates through three reportable segments — the Americas, including North America and South America; Europe, which includes the Middle East and Africa (EMEA); and Asia Pacific/China (Asia).

In the reported quarter, the Americas segment recorded revenues of $1.65 billion, which declined 4% from the year-ago period but beat the Zacks Consensus Estimate of $1.64 billion. The segment recorded an adjusted EBITDA of $80 million, up from $69 million recorded in the prior-year period and topped the Zacks Consensus Estimate of $57 million, driven by sales outperformance.

In the fiscal first quarter, the EMEA segment registered revenues of $1.27 billion, which increased 7.6% year over year and exceeded the Zacks Consensus Estimate of $1.25 billion. The segment recorded EBITDA of $45 million in the quarter under review, which was higher than $28 million generated in the year-ago period. It also outpaced the Zacks Consensus Estimate of $40.99 million on the back of improved business performance, forex benefits and increased net commodities.

In the quarter, revenues in the Asia segment came in at $770 million, down 6.2% year over year and missed the Zacks Consensus Estimate of $844. The segment’s adjusted EBITDA fell 17.4% year over year to $114 million due to the end of production of a few programs and the launch of others, and the timing of recoveries.

Financial Position

Adient had cash and cash equivalents of $990 million as of Dec 31, 2023 compared with $1.11 billion as of Sep 30, 2023.

Long-term debt amounted to $2,403 million in the reported quarter, up from $2,401 million as of Sep 30, 2023.

Capital expenditures totaled $55 million in the fiscal first quarter of 2024 compared with $61 million in the prior-year quarter.

During the quarter under review, Adient repurchased nearly three million shares for $100 million.

Revised Guidance 2024

Adient envisions fiscal 2024 revenues in the range of $15.40-$15.50 billion, down from the previous guidance of $15.60-$15.70 billion. Adjusted EBITDA is estimated to be $985 million, down from the prior guidance of $1.01 billion. Equity income and capex are projected between $70 million and $310 million, respectively, the same as the previous guidance. Free cash flow is estimated to be $300 million. Interest expenses and cash tax are estimated between $185 million and $105 million, respectively.

Zacks Rank & Key Picks

ADNT currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the auto space are Modine Manufacturing Company MOD, NIO Inc. NIO and Oshkosh Corporation OSK. MOD sports a Zacks Rank #1 (Strong Buy), while NIO & OSK carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MOD’s 2024 sales and earnings suggests year-over-year growth of 4% and 67.2%, respectively. The EPS estimates for 2024 and 2025 have improved 22 cents each in the past 30 days.

The Zacks Consensus Estimate for NIO’s 2023 sales implies year-over-year growth of 10.4%. The EPS estimates for 2024 have improved 7 cents in the past 30 days.

The Zacks Consensus Estimate for OSK’s 2024 sales and earnings suggests year-over-year growth of 6.7% and 4%, respectively. The EPS estimates for 2024 and 2025 have improved 16 cents and 29 cents, respectively, in the past 30 days.

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