American Axle & Manufacturing Holdings (AXL - Free Report) reported a loss of 7 cents per share in fourth-quarter 2022, as against the Zacks Consensus Estimate of earnings of 1 cent. Lower-than-anticipated sales from the Driveline unit and lower-than-anticipated adjusted EBITDA in the Metal Forming business resulted in the underperformance. The reported loss narrowed from 9 cents a share incurred a year ago. The company generated quarterly revenues of $1,392.7 million, surpassing the Zacks Consensus Estimate of $1,383 million. Revenues increased 12.8% on a year-over-year basis, led by favorable volume/mix and contribution from the Tekfor acquisition.
Segmental Performance
In the reported quarter, the Driveline segment recorded sales of $967.2 million, rising 6% year over year but missing the Zacks Consensus Estimate of $1,046 million. The segment registered adjusted EBITDA of $126.7 million, declining 0.1% on a year-over-year basis but beating the consensus mark of $107 million.
The company’s Metal Forming business generated revenues of $527.1 million during the quarter, an increase of 28% from the year-ago figure. It exceeded the consensus estimate of $440 million. The segment witnessed adjusted EBITDA of $31 million, falling 16.4% and lagging the consensus mark of $59 million.
Financial Position
American Axle’s fourth-quarter SG&A expenses totaled $88.5 million, down from $77.5 million incurred in the prior-year quarter.
Net cash provided by operating activities was $148.5 million, up from $102.4 million in the year-ago period. Capital spending in the quarter was $53.1 million, down from $65.2 million. In the three months ended Dec 31, 2022, the company posted an adjusted free cash flow of $99 million, up from $43.6 million recorded in the year-earlier period.
In the quarter, American Axle had cash and cash equivalents of $511.5 million compared with $530.2 million on Dec 31, 2021. Its net long-term debt was $2,845.1 million, down from $3,085.7 million as of Dec 31, 2021.
2023 Outlook
American Axle envisions revenues in the range of $5.95-$6.25 billion. The estimate for adjusted EBITDA is in the range of $725-$800 million. Adjusted FCF is expected to be in the range of $225-$300 million, considering capital spending between 3.5% and 4% of sales.
Zacks Rank & Key Picks
AXL currently has a Zacks Rank #5 (Strong Sell).
A few better-ranked players in the auto space include Wabash National (WNC - Free Report) , Modine Manufacturing (MOD - Free Report) and Hyliion (HYLN - Free Report) . WNC and MOD sport a Zacks Rank #1 (Strong Buy) and HYLN carries a Zacks Rank #2 (Buy).
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 13.06% and 24%, respectively.
Modine designs and manufactures world-class thermal dynamic equipment for today's agricultural, mining & construction equipment. The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 11.43% and 43.09%, respectively.
Hyliion provides electrified powertrain solutions for Class 8 commercial vehicles. The Zacks Consensus Estimate for HYLN’s 2023 sales implies year-over-year growth of 538.07%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
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American Axle & Manufacturing Holdings (AXL - Free Report) reported a loss of 7 cents per share in fourth-quarter 2022, as against the Zacks Consensus Estimate of earnings of 1 cent. Lower-than-anticipated sales from the Driveline unit and lower-than-anticipated adjusted EBITDA in the Metal Forming business resulted in the underperformance. The reported loss narrowed from 9 cents a share incurred a year ago. The company generated quarterly revenues of $1,392.7 million, surpassing the Zacks Consensus Estimate of $1,383 million. Revenues increased 12.8% on a year-over-year basis, led by favorable volume/mix and contribution from the Tekfor acquisition.
Segmental Performance
In the reported quarter, the Driveline segment recorded sales of $967.2 million, rising 6% year over year but missing the Zacks Consensus Estimate of $1,046 million. The segment registered adjusted EBITDA of $126.7 million, declining 0.1% on a year-over-year basis but beating the consensus mark of $107 million.
The company’s Metal Forming business generated revenues of $527.1 million during the quarter, an increase of 28% from the year-ago figure. It exceeded the consensus estimate of $440 million. The segment witnessed adjusted EBITDA of $31 million, falling 16.4% and lagging the consensus mark of $59 million.
Financial Position
American Axle’s fourth-quarter SG&A expenses totaled $88.5 million, down from $77.5 million incurred in the prior-year quarter.
Net cash provided by operating activities was $148.5 million, up from $102.4 million in the year-ago period. Capital spending in the quarter was $53.1 million, down from $65.2 million. In the three months ended Dec 31, 2022, the company posted an adjusted free cash flow of $99 million, up from $43.6 million recorded in the year-earlier period.
In the quarter, American Axle had cash and cash equivalents of $511.5 million compared with $530.2 million on Dec 31, 2021. Its net long-term debt was $2,845.1 million, down from $3,085.7 million as of Dec 31, 2021.
2023 Outlook
American Axle envisions revenues in the range of $5.95-$6.25 billion. The estimate for adjusted EBITDA is in the range of $725-$800 million. Adjusted FCF is expected to be in the range of $225-$300 million, considering capital spending between 3.5% and 4% of sales.
Zacks Rank & Key Picks
AXL currently has a Zacks Rank #5 (Strong Sell).
A few better-ranked players in the auto space include Wabash National (WNC - Free Report) , Modine Manufacturing (MOD - Free Report) and Hyliion (HYLN - Free Report) . WNC and MOD sport a Zacks Rank #1 (Strong Buy) and HYLN carries a Zacks Rank #2 (Buy).
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 13.06% and 24%, respectively.
Modine designs and manufactures world-class thermal dynamic equipment for today's agricultural, mining & construction equipment. The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 11.43% and 43.09%, respectively.
Hyliion provides electrified powertrain solutions for Class 8 commercial vehicles. The Zacks Consensus Estimate for HYLN’s 2023 sales implies year-over-year growth of 538.07%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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