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American Axle's (AXL) Q1 Earnings & Revenues Beat Estimates
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Shares of American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) gained 4.6% in a day’s trading, following its first-quarter 2018 earnings release. The company posted adjusted earnings of 98 cents per share for first-quarter 2018, beating the Zacks Consensus Estimate of 81 cents. In first-quarter 2017, adjusted earnings were $1.03.
During the quarter under review, the company reported net income of $89.4 million or 78 cents per share compared with $78.4 million or 99 cents per share in the year-ago quarter.
Revenues increased to $1.86 billion in the reported quarter from the year-ago figure of $1.05 billion. The top line also surpassed the Zacks Consensus Estimate of $1.76 billion. Realization of new business backlog and sustained strength in end markets led to the rise in year-over-year sales.
American Axle & Manufacturing Holdings, Inc. Price, Consensus and EPS Surprise
American Axle’s SG&A (Selling, General & Administrative) expenses were $97.3 million for the reported period in comparison with $81.2 million in the prior-year quarter.
Gross profit increased to $316.3 million in first-quarter 2018 from $210.7 million in the prior-year quarter. Operating income increased to $175.8 million from $111.9 million a year ago.
Financial Position
American Axle had cash and cash equivalents of $340.7 million as of Mar 31, 2018, down from $376.8 million as of Dec 31, 2017. Net long-term debt was $4 billion as of Mar 31, 2018, almost in line with full-year 2017.
Cash flow from operations in first-quarter 2018 was $66.9 million in comparison with the prior year's figure of $62.3 million. At the reported quarter-end, American Axle’s adjusted free cash outflow was $41.7 million compared with an inflow of $60.5 million for the same period last year. The figure excluded the impact of cash payments for restructuring and acquisition-related costs, settlements of pre-existing accounts payable balances, with acquired entities and interest payments upon the settlement of acquired company debt.
Divestment
American Axle sold the aftermarket business of its Powertrain unit to Hidden Harbor Capital Partners in April. Cash proceeds from sales were roughly $50 million. The impact of this will be recorded in second-quarter 2018 results.
2018 Outlook
For 2018, the company reiterated its sales expectation to be roughly $7 billion, mostly depending on its anticipated program launches and an assumption that the U.S. industry sales on a seasonally adjusted annualized rate (SAAR) is expected to be 16.8-17 million light-vehicle units in 2018.
The company also reiterated its anticipated adjusted earnings before income taxes, depreciation and amortization (EBITDA) margin to be 17.5-18% of sales in 2018. Also, American Axle’s guidance for adjusted free cash is 5% of sales in 2018.
Zacks Rank & Other Stocks to Consider
American Axle carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the auto space are Dana Incorporated (DAN - Free Report) , Volkswagen AG and Allison Transmission Holdings, Inc. (ALSN - Free Report) . Dana and Volkswagen carry a Zacks Rank #2, while Allison Transmission sports a Zacks Rank #1 (Strong Buy). You can seethe complete list of today’s Zacks #1 Rank stocks here.
Dana has expected long-term growth rate of 10%. In a year's time, shares of the company have gained 13.2%.
Volkswagen has expected long-term growth rate of 6.2%. Shares of the company have risen 24.9%, over the past year.
Allison Transmission has expected long-term growth rate of 10%. Over the past month, shares of the company have gained 7.8%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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American Axle's (AXL) Q1 Earnings & Revenues Beat Estimates
Shares of American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) gained 4.6% in a day’s trading, following its first-quarter 2018 earnings release. The company posted adjusted earnings of 98 cents per share for first-quarter 2018, beating the Zacks Consensus Estimate of 81 cents. In first-quarter 2017, adjusted earnings were $1.03.
During the quarter under review, the company reported net income of $89.4 million or 78 cents per share compared with $78.4 million or 99 cents per share in the year-ago quarter.
Revenues increased to $1.86 billion in the reported quarter from the year-ago figure of $1.05 billion. The top line also surpassed the Zacks Consensus Estimate of $1.76 billion. Realization of new business backlog and sustained strength in end markets led to the rise in year-over-year sales.
American Axle & Manufacturing Holdings, Inc. Price, Consensus and EPS Surprise
American Axle & Manufacturing Holdings, Inc. Price, Consensus and EPS Surprise | American Axle & Manufacturing Holdings, Inc. Quote
American Axle’s SG&A (Selling, General & Administrative) expenses were $97.3 million for the reported period in comparison with $81.2 million in the prior-year quarter.
Gross profit increased to $316.3 million in first-quarter 2018 from $210.7 million in the prior-year quarter. Operating income increased to $175.8 million from $111.9 million a year ago.
Financial Position
American Axle had cash and cash equivalents of $340.7 million as of Mar 31, 2018, down from $376.8 million as of Dec 31, 2017. Net long-term debt was $4 billion as of Mar 31, 2018, almost in line with full-year 2017.
Cash flow from operations in first-quarter 2018 was $66.9 million in comparison with the prior year's figure of $62.3 million. At the reported quarter-end, American Axle’s adjusted free cash outflow was $41.7 million compared with an inflow of $60.5 million for the same period last year. The figure excluded the impact of cash payments for restructuring and acquisition-related costs, settlements of pre-existing accounts payable balances, with acquired entities and interest payments upon the settlement of acquired company debt.
Divestment
American Axle sold the aftermarket business of its Powertrain unit to Hidden Harbor Capital Partners in April. Cash proceeds from sales were roughly $50 million. The impact of this will be recorded in second-quarter 2018 results.
2018 Outlook
For 2018, the company reiterated its sales expectation to be roughly $7 billion, mostly depending on its anticipated program launches and an assumption that the U.S. industry sales on a seasonally adjusted annualized rate (SAAR) is expected to be 16.8-17 million light-vehicle units in 2018.
The company also reiterated its anticipated adjusted earnings before income taxes, depreciation and amortization (EBITDA) margin to be 17.5-18% of sales in 2018. Also, American Axle’s guidance for adjusted free cash is 5% of sales in 2018.
Zacks Rank & Other Stocks to Consider
American Axle carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the auto space are Dana Incorporated (DAN - Free Report) , Volkswagen AG and Allison Transmission Holdings, Inc. (ALSN - Free Report) . Dana and Volkswagen carry a Zacks Rank #2, while Allison Transmission sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Dana has expected long-term growth rate of 10%. In a year's time, shares of the company have gained 13.2%.
Volkswagen has expected long-term growth rate of 6.2%. Shares of the company have risen 24.9%, over the past year.
Allison Transmission has expected long-term growth rate of 10%. Over the past month, shares of the company have gained 7.8%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>