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American Axle (AXL) Q4 Earnings & Sales Top Estimates, Up Y/Y

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American Axle & Manufacturing Holdings (AXL - Free Report) posted adjusted earnings of 51 cents per share, beating the Zacks Consensus Estimate of earnings of 30 cents. Moreover, the reported figure comes in higher than the year-ago quarter’s earnings of 13 cents per share.

The Detroit-based global automotive parts supplier generated revenues of $1,437.9 million, surpassing the Zacks Consensus Estimate of $1,365 million on higher-than-anticipated revenues from both major segments of the company.  

Revenues also inched up 0.19% from the year-ago figure of $1,430 million. Per the company, the coronavirus crisis affected sales to the tune of $40 million for the reported quarter.

Segmental Performance

For the December-end quarter, the Driveline segment recorded sales of $1,105.7 million, up 8.1% year over year. The metric also outpaced the Zacks Consensus Estimate of $1,047 million. Also, the segment posted an adjusted EBITDA of $186.2 million, beating the consensus mark of $148 million and higher than the $124.9 million witnessed in the prior-year quarter.

The company’s Metal Forming business generated revenues of $433.4 million during the fourth quarter, up 8.03% from the year-ago figure of $401.2 million. The reported figure also topped the consensus mark of $409 million. Nonetheless, the segment witnessed an adjusted EBITDA of $75.3 million, exceeding the consensus mark of $69 million and higher than the prior year’s income of $66.2 million.

Financial Position

American Axle’s fourth-quarter 2020 SG&A (selling, general & administrative) expenses totaled $83.3 million, down from the $90 million incurred in the prior-year period.

For the three-month period ended Dec 31, 2020, the company posted adjusted free cash flow (FCF) of $172.7 million, as against the adjusted FCF of $116.5 million recorded in the year-earlier period. Capital spending for the quarter came in at $69.2 million, down from the year-ago period’s $95 million.

As of Dec 31, 2020, American Axle had cash and cash equivalents of $557 million compared with $532 million on Dec 31, 2019. The company had net long-term debt of $3,441.3 million as of Dec 31, 2020, down from $3,612.3 million on Dec 31, 2019.

Outlook for 2021

American Axle projects full-year 2021 revenues in the range of $5.3-$5.5 billion and adjusted EBITDA of $850-$925 million. The company expects adjusted free cash flow in the $300-$400 million band. The company’s gross new and incremental business backlog launching from 2021-2023 is estimated at approximately $600 million in future annual sales.

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 are Magna International (MGA - Free Report) , Meritor Inc. and Adient Plc (ADNT - Free Report) , all of which sport a Zacks Rank of 1, at present.

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