It has been about a month since the last earnings report for Adient (ADNT Quick QuoteADNT - Free Report) . Shares have added about 7.8% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Adient due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Adient’s Q1 Earnings Surpass, Sales Lag Estimates

Adient reported adjusted earnings per share of $1.71 for first-quarter fiscal 2021, beating the Zacks Consensus Estimate of 95 cents on better-than-expected contribution across all segments. Moreover, the bottom line compared favorably with the year-ago earnings of 96 cents per share, marking a surge of 78%. During the reported quarter, Adient generated net sales of $3,848 million, down from $3,936 million recorded in the prior-year period. The top-line figure also missed the Zacks Consensus Estimate of $3,918 million.

Segmental Performance

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

For the reported quarter, the Americas segment recorded revenues of $1,737 million, down from $1,859 million generated in the year-ago period. Adient posted adjusted EBITDA of $132 million for the fiscal first quarter, up from $94 million recorded in the prior-year period, primarily on sustained improvement in the Metals business, and lower freight as well as ops waste. The metric also topped the consensus mark of $89 million.

For the fiscal first quarter, the EMEA segment registered revenues of $1,604 million, rising 2.5% year over year. Its quarterly EBITDA came in at $114 million, reflecting a jump from the prior-year profit of $49 million and topping the consensus mark of $72 million. This upside resulted from decreased SG&A and launch costs, as well as persistent improvement in the metals business.

For the December-end quarter, revenues in the Asia segment came in at $554 million compared with the year-earlier quarter’s $572 million. The company’s adjusted EBITDA was $151 million, lower than the $177 million reported in first-quarter fiscal 2020 on reduced volumes and the absence of Interiors equity income. However, the metric topped the consensus mark of $146 million.

Financial Position

Adient had cash and cash equivalents of $1,820 million as of Dec 31, 2020 compared with $1,692 million on Sep 30, 2019. As of Dec 31, long-term debt amounted to $4,342 million, up from $4,097 billion on Sep 30, 2019. Capital expenditure declined to $71 million for the fiscal first quarter from $91 million recorded in the prior-year period.

2021 View Intact

The company reiterated its guidance for fiscal 2021. Adient expects revenues within $14.6-$15 billion. Adjusted EBITDA is anticipated in the band of $1-$1.1 billion. Moreover, the company projects free cash flow of up to 100 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted -10.6% due to these changes.

VGM Scores

At this time, Adient has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Adient has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.