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American Axle (AXL) Stock Rallies 9.4% on Q3 Earnings Beat
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Shares of American Axle Manufacturing Holdings, Inc. (AXL - Free Report) have gained more than 9% since the third-quarter 2020 earnings announcement on Oct 30. The company delivered stellar quarterly financial results, thanks to the rebounding global production volumes and its cost-containment measures. Amid the improving scenario, management reissued the previously-suspended 2020 guidance and expects full-year sales of $4.6 billion, with adjusted EBITDA in the range of $665-$680 million. The company also anticipates adjusted free cash flow for the current year to be in the band of $220-$235 million.
American Axle posted adjusted earnings of $1.15 per share, handily beating the Zacks Consensus Estimate of earnings of 21 cents. Moreover, the reported figure comes in significantly higher than the year-ago quarter’s earnings of 58 cents per share.
The Detroit-based global automotive parts supplier generated revenues of $1,414.1 million, missing the Zacks Consensus Estimate of $1,444 million on lower-than-expected revenues from both major segments of the company.
Revenues, moreover, slipped 15.7% from the year-ago figure of $1,677.4 million on the pandemic-led sluggish demand. Per the company, the coronavirus crisis affected sales to the tune of $87 million for the reported quarter.
American Axle Manufacturing Holdings, Inc. Price, Consensus and EPS Surprise
For the September-end quarter, the Driveline segment recorded sales of $1,094.5 million, down 7.8% year over year. The metric also missed the Zacks Consensus Estimate of $1,133 million. Nonetheless, the segment posted adjusted EBITDA of $207.4 million, higher than the $181 million witnessed in the prior-year quarter.
The company’s Metal Forming business generated revenues of $433.2 million during the third quarter, declining 9.1% from the year-ago figure of $476.6 million. The reported figure also lagged the consensus mark of $458 million. Nonetheless, the segment witnessed an adjusted EBITDA of $89.7 million against the prior year’s income of $79.3 million.
Financial Position
American Axle’s third-quarter 2020 SG&A (selling, general & administrative) expenses totaled $66.5 million, down from the $92.7 million incurred in the prior-year period.
For the three-month period ended Sep 30, 2020, the company posted adjusted free cash flow (FCF) of $217.2 million, as against the adjusted FCF of $160.5 million recorded in the year-earlier period. Capital spending for the quarter came in at $40.5 million, down from the year-ago period’s $97.5 million.
As of Sep 30, 2020, American Axle had cash and cash equivalents of $537.3 million compared with $532 million on Dec 31, 2019. The company had net long-term debt of $3,555.4 million as of Sep 30, 2020, down from $3,612.3 million on Dec 31, 2019.
Some other top-ranked stocks in the same sector include Autoliv Inc (ALV - Free Report) , Lear Corporation (LEA - Free Report) and Navistar International Corporation , all of which sport a Zacks Rank of 1, at present.
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American Axle (AXL) Stock Rallies 9.4% on Q3 Earnings Beat
Shares of American Axle Manufacturing Holdings, Inc. (AXL - Free Report) have gained more than 9% since the third-quarter 2020 earnings announcement on Oct 30. The company delivered stellar quarterly financial results, thanks to the rebounding global production volumes and its cost-containment measures. Amid the improving scenario, management reissued the previously-suspended 2020 guidance and expects full-year sales of $4.6 billion, with adjusted EBITDA in the range of $665-$680 million. The company also anticipates adjusted free cash flow for the current year to be in the band of $220-$235 million.
American Axle posted adjusted earnings of $1.15 per share, handily beating the Zacks Consensus Estimate of earnings of 21 cents. Moreover, the reported figure comes in significantly higher than the year-ago quarter’s earnings of 58 cents per share.
The Detroit-based global automotive parts supplier generated revenues of $1,414.1 million, missing the Zacks Consensus Estimate of $1,444 million on lower-than-expected revenues from both major segments of the company.
Revenues, moreover, slipped 15.7% from the year-ago figure of $1,677.4 million on the pandemic-led sluggish demand. Per the company, the coronavirus crisis affected sales to the tune of $87 million for the reported quarter.
American Axle Manufacturing Holdings, Inc. Price, Consensus and EPS Surprise
American Axle Manufacturing Holdings, Inc. price-consensus-eps-surprise-chart | American Axle Manufacturing Holdings, Inc. Quote
Segmental Performance
For the September-end quarter, the Driveline segment recorded sales of $1,094.5 million, down 7.8% year over year. The metric also missed the Zacks Consensus Estimate of $1,133 million. Nonetheless, the segment posted adjusted EBITDA of $207.4 million, higher than the $181 million witnessed in the prior-year quarter.
The company’s Metal Forming business generated revenues of $433.2 million during the third quarter, declining 9.1% from the year-ago figure of $476.6 million. The reported figure also lagged the consensus mark of $458 million. Nonetheless, the segment witnessed an adjusted EBITDA of $89.7 million against the prior year’s income of $79.3 million.
Financial Position
American Axle’s third-quarter 2020 SG&A (selling, general & administrative) expenses totaled $66.5 million, down from the $92.7 million incurred in the prior-year period.
For the three-month period ended Sep 30, 2020, the company posted adjusted free cash flow (FCF) of $217.2 million, as against the adjusted FCF of $160.5 million recorded in the year-earlier period. Capital spending for the quarter came in at $40.5 million, down from the year-ago period’s $97.5 million.
As of Sep 30, 2020, American Axle had cash and cash equivalents of $537.3 million compared with $532 million on Dec 31, 2019. The company had net long-term debt of $3,555.4 million as of Sep 30, 2020, down from $3,612.3 million on Dec 31, 2019.
Zacks Rank & Other Stocks to Consider
American Axle currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Some other top-ranked stocks in the same sector include Autoliv Inc (ALV - Free Report) , Lear Corporation (LEA - Free Report) and Navistar International Corporation , all of which sport a Zacks Rank of 1, at present.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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