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American Axle (AXL) Down 4% Since Q2 Earnings & Sales Beat

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Despite delivering a comprehensive beat and raising its 2021 guidance, American Axle & Manufacturing Holdings, Inc.’s (AXL - Free Report) shares have declined 4% since the company reported quarterly results on Jul 30. The company reported adjusted earnings of 29 cents per share for second-quarter 2021 against the Zacks Consensus Estimate of a loss of 3 cents. The bottom line also turned around from the year-ago loss of $1.79 a share incurred in the corresponding quarter of 2020. Higher-than-expected sales and EBITDA from the Metal Forming segment of the company led to this outperformance. The company generated quarterly revenues of $1,283.3 million, surpassing the Zacks Consensus Estimate of $1,141 million. Revenues also skyrocketed 149% on a year-over-year basis.

Segmental Performance

For the June-end quarter, the Driveline segment recorded sales of $935.4 million, up a whopping 148% year on year. The metric, however, missed the Zacks Consensus Estimate of $1,013 million. The segment registered an adjusted EBITDA of $151.3 million, falling short of the consensus mark of $158 million but reversing the year-ago loss of $25 million.

The company’s Metal Forming business generated revenues of $440.1 million during the second quarter, jumping from the year-ago figure of $168.2 million. The reported figure also topped the consensus mark of $431 million. Also, the segment witnessed an adjusted EBITDA of $71.3 million, exceeding the consensus mark of $60 million and turning around from the prior-year loss of $27.1 million.

Financial Position

American Axle’s second-quarter 2021 SG&A expenses totaled $86.2 million, up from $73.8 million incurred in the prior-year period.

For the three-month period ended Jun 30, 2021, the company posted adjusted free cash flow (FCF) of $136.1 million against negative FCF of $161.8 million recorded in the year-earlier period. Capital spending for the quarter came in at $41.2 million, up from the year-ago period’s $35 million.

As of Jun 30, 2021, American Axle had cash and cash equivalents of $587.7 million compared with $557 million on Dec 31, 2020. The company had net long-term debt of $3,118.5 million as of Jun 30, 2021, down from $3,441.3 million as of Dec 31, 2020.

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American Axle’s guidance for full-year 2021 revenues remains unchanged. Revenues are envisioned in the range of $5.3-$5.5 billion. Meanwhile, projections for adjusted EBITDA and FCF have been raised. The firm expects adjusted EBITDA and FCF in the band of $875-$925 million and $350-$425 million, up from the prior forecast of $850-$925 million and $300-$400 million, respectively.

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.

Some better-ranked stocks in the same sector include Meritor (MTOR - Free Report) , LCI Industries (LCII - Free Report) and Luminar Technologies (LAZR - Free Report) , each carrying a Zacks Rank of 2 (Buy), at present.