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American Axle (AXL) Stock Up 7.3% Since Q1 Earnings Beat

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American Axle & Manufacturing Holdings, Inc.’s (AXL - Free Report) shares appreciated 7.3% after the company reported outstanding quarterly results on May 7. The Detroit-based global automotive parts supplier not just delivered a comprehensive beat but also posted higher year-over-year earnings and sales.

The company delivered adjusted earnings of 57 cents per share for first-quarter 2021, beating the Zacks Consensus Estimate of earnings of 25 cents. Higher-than-expected contribution from both major segments of the company led to this outperformance. Moreover, the reported figure comes in higher than the year-ago quarter’s earnings of 20 cents per share.

American Axle generated quarterly revenues of $1,425.1 million, surpassing the Zacks Consensus Estimate of $1,312.4 million. Revenues also climbed 6.1% from the year-ago figure of $1,343.5 million. Per the company, sales were unfavorably impacted by the semiconductor chip shortage to the tune of roughly $64 million in the reported quarter.

Segmental Performance

For the March-end quarter, the Driveline segment recorded sales of $1,026.1 million, up 8.5% year on year. The metric, however, missed the Zacks Consensus Estimate of $1,094 million. Nonetheless, the segment registered an adjusted EBITDA of $170.5 million, marginally beating the consensus mark of $169 million and higher than the $134.5 million witnessed in the prior-year quarter.

The company’s Metal Forming business generated revenues of $489.3 million during the first quarter, up from the year-ago figure of $482.1 million. The reported figure also topped the consensus mark of $446 million. Also, the segment witnessed an adjusted EBITDA of $92.4 million, significantly exceeding the consensus mark of $4.7 million as well as higher than the prior year’s income of $78.8 million.

Financial Position

American Axle’s first-quarter 2021 SG&A (selling, general & administrative) expenses totaled $90 million, slightly down from the $90.3 million incurred in the prior-year period.

For the three-month period ended Mar 31, 2021, the company posted adjusted free cash flow (FCF) of $174.1 million, as against the adjusted FCF of $83.3 million recorded in the year-earlier period. Capital spending for the quarter came in at $39.6 million, down from the year-ago period’s $69.2 million.

As of Mar 31, 2021, American Axle had cash and cash equivalents of $601.2 million compared with $682.7 million on Mar 31, 2020. The company had net long-term debt of $3,360.9 million as of Mar 31, 2021, down from $3,511.7 million as of Mar 31, 2020.

Outlook for 2021

American Axle’s guidance for full-year 2021 remains unchanged. The company projects 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.

Zacks Rank & Stocks to Consider

American Axle currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Better-ranked stocks in the same sector include BRP Inc. (DOOO - Free Report) , LCI Industries (LCII - Free Report) and Oshkosh Corporation (OSK - Free Report) , all of which sport a Zacks Rank of 1, at present.

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