Back to top

Image: Bigstock

Adient (ADNT) Q2 Earnings Beat on EMEA & Asia Markets Strength

Read MoreHide Full Article

Adient (ADNT - Free Report) reported adjusted earnings per share of $1.15 for second-quarter fiscal 2021, breezing past the Zacks Consensus Estimate of 59 cents on better-than-expected contribution across EMEA and Asia markets. Moreover, the bottom line compared favorably with the year-ago earnings of 62 cents per share, marking a surge of 85.5%. For the reported quarter, Adient generated net sales of $3,819 million, up from $3,511 million recorded in the prior-year period. The top-line figure also topped the Zacks Consensus Estimate of $3,541 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 $1,644 million compared with $1,641 million generated in the year-ago period. Adient posted adjusted EBITDA of $64 million for the fiscal second quarter, down from $106 million recorded in the prior-year period, primarily owing to operational inefficiencies amid supply chain disruptions.

For the fiscal second quarter, the EMEA segment registered revenues of $1,636 million, rising 10% year over year. Its quarterly EBITDA came in at $141 million, reflecting a jump from the prior-year profit of $62 million and topping the consensus mark of $69 million. This upside resulted from decreased SG&A and launch costs as well as persistent improvement in the metals business.

For the March-end quarter, revenues in the Asia segment came in at $588 million, up from $444 million generated in the year-ago quarter. The company’s adjusted EBITDA was $121 million, increasing from $63 million reported in first-quarter fiscal 2020 and surpassing the consensus mark of $70 million. The results were aided by improved volume and mix in China along with lower launch and freight expenses. 

Financial Position

Adient had cash and cash equivalents of $984 million as of Mar 31, 2020 compared with $1,692 million on Sep 30, 2019. As of Mar 31, long-term debt amounted to $3,646 million, down from $4,097 billion on Sep 30, 2019. Capital expenditure declined to $55 million for the fiscal second quarter from $94 million recorded in the prior-year period.

2021 View

Adient expects fiscal 2021 revenues within $14.6-$15 billion. Adjusted EBITDA is anticipated in the band of $1-$1.1 billion. The company projects free cash flow in the band of $50-$150 million. Adient — which shares space with Magna International (MGA - Free Report) , Meritor (MTOR - Free Report) and American Axle & Manufacturing (AXL - Free Report) — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities

In addition to the stocks you read about above, would you like to see Zacks’ top picks to capitalize on the Internet of Things (IoT)? It is one of the fastest-growing technologies in history, with an estimated 77 billion devices to be connected by 2025. That works out to 127 new devices per second.

Zacks has released a special report to help you capitalize on the Internet of Things’s exponential growth. It reveals 4 under-the-radar stocks that could be some of the most profitable holdings in your portfolio in 2021 and beyond.

Click here to download this report FREE >>