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Adient plc (ADNT - Free Report) reported an adjusted loss per share of 13 cents for the second quarter of fiscal 2022. The Zacks Consensus Estimate was pegged at earnings of 2 cents. The bottom line also compared unfavorably with the year-ago earnings of $1.15 per share. The downside stemmed from declining profitability across all the segments.
In the reported quarter, Adient generated net sales of $3,506 million, down from $3,819 million recorded in the prior-year period. The top line, however, surpassed the Zacks Consensus Estimate of $3,409 million.
Adient currently operates through three reportable segments — the Americas, which includes North America and South America; Europe, Middle East, and Africa (EMEA); and Asia Pacific/China (Asia).
In the reported quarter, the Americas segment recorded revenues of $1,596 million, declining from $1,644 million generated in the year-ago period. The segment posted adjusted EBITDA of $46 million in the quarter, falling from $64 million recorded in the prior-year period. The decrease was due to lower volume and mix, supply chain disruptions and increased commodity and freight costs.
In the fiscal second quarter, the EMEA segment registered revenues of $1,218 million, declining from $1,644 in the year-ago quarter. The segment recorded $30 million in EBITDA in the quarter under review, plummeting from $141 million. Unfavorable forex translations, operating inefficiencies and higher commodity and freight costs resulted in bleak results.
In the March-end quarter, revenues in the Asia segment came in at $723 million, up from $588 million generated in the year-ago quarter. The segment’s adjusted EBITDA was $105 million, decreasing from $121 million. Lower equity income and unfavorable volume and mix stemming from rising COVID-19 infections in China hurt EBITDA.
Financial Position
Adient had cash and cash equivalents of $1,118 million as of Mar 31, 2022, compared with $1,521 million on Sep 30, 2021. Long-term debt amounted to $2,766 million in the reported quarter, down from $3,512 million. Capital expenditure totaled $57 million in the fiscal second quarter of 2022.
Outlook
As anticipated, the ongoing macro headwinds in the form of supply chain disruptions and inflationary pressure on commodities, freight and energy are likely to affect the company significantly. To that end, the company has trimmed its fiscal 2022 projections. It now envisions revenues of $14.2 billion, down from the prior forecast of $14.8 billion. Adjusted EBITDA is expected to decline $100 million from the year-ago levels. Expected equity income has been downwardly revised to $75 million from the prior estimation of $90 million. Capital expenditure remains unchanged in the range of $300-$325 million.
Zacks Rank & Key Picks
Currently, Adient has a Zacks Rank #5 (Strong Sell).
Canada-based BRP designs, develops, manufactures and distributes recreational vehicles. BRP’s expected earnings and sales growth for fiscal 2023 is 9% and 25%, respectively. The Zacks Consensus Estimate for fiscal 2023 earnings has improved 7% over the past 60 days.
Indiana-based Wabash is one of the leading manufacturers of semi-trailers in North America. Wabash’s expected earnings and sales growth for 2022 is 230.4% and 35.2%, respectively. The Zacks Consensus Estimate for 2022 earnings has been revised upward by 9 cents over the past seven days.
Charlotte-based Driven Brands is an automotive services company, offering consumer and commercial automotive repair and maintenance needs. DRVN’s expected earnings and sales growth for 2022 is 26% and 32%, respectively. The Zacks Consensus Estimate for 2022 earnings has moved north by 2 cents over the past seven days.
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Adient (ADNT) Q2 Earnings Miss, Sales Beat, '22 View Trimmed
Adient plc (ADNT - Free Report) reported an adjusted loss per share of 13 cents for the second quarter of fiscal 2022. The Zacks Consensus Estimate was pegged at earnings of 2 cents. The bottom line also compared unfavorably with the year-ago earnings of $1.15 per share. The downside stemmed from declining profitability across all the segments.
In the reported quarter, Adient generated net sales of $3,506 million, down from $3,819 million recorded in the prior-year period. The top line, however, surpassed the Zacks Consensus Estimate of $3,409 million.
Adient Price, Consensus and EPS Surprise
Adient price-consensus-eps-surprise-chart | Adient Quote
Segmental Performance
Adient currently operates through three reportable segments — the Americas, which includes North America and South America; Europe, Middle East, and Africa (EMEA); and Asia Pacific/China (Asia).
In the reported quarter, the Americas segment recorded revenues of $1,596 million, declining from $1,644 million generated in the year-ago period. The segment posted adjusted EBITDA of $46 million in the quarter, falling from $64 million recorded in the prior-year period. The decrease was due to lower volume and mix, supply chain disruptions and increased commodity and freight costs.
In the fiscal second quarter, the EMEA segment registered revenues of $1,218 million, declining from $1,644 in the year-ago quarter. The segment recorded $30 million in EBITDA in the quarter under review, plummeting from $141 million. Unfavorable forex translations, operating inefficiencies and higher commodity and freight costs resulted in bleak results.
In the March-end quarter, revenues in the Asia segment came in at $723 million, up from $588 million generated in the year-ago quarter. The segment’s adjusted EBITDA was $105 million, decreasing from $121 million. Lower equity income and unfavorable volume and mix stemming from rising COVID-19 infections in China hurt EBITDA.
Financial Position
Adient had cash and cash equivalents of $1,118 million as of Mar 31, 2022, compared with $1,521 million on Sep 30, 2021. Long-term debt amounted to $2,766 million in the reported quarter, down from $3,512 million. Capital expenditure totaled $57 million in the fiscal second quarter of 2022.
Outlook
As anticipated, the ongoing macro headwinds in the form of supply chain disruptions and inflationary pressure on commodities, freight and energy are likely to affect the company significantly. To that end, the company has trimmed its fiscal 2022 projections. It now envisions revenues of $14.2 billion, down from the prior forecast of $14.8 billion. Adjusted EBITDA is expected to decline $100 million from the year-ago levels. Expected equity income has been downwardly revised to $75 million from the prior estimation of $90 million. Capital expenditure remains unchanged in the range of $300-$325 million.
Zacks Rank & Key Picks
Currently, Adient has a Zacks Rank #5 (Strong Sell).
Some better-ranked players in the same space include BRP (DOOO - Free Report) , Wabash National (WNC - Free Report) and Driven Brands Holdings (DRVN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Canada-based BRP designs, develops, manufactures and distributes recreational vehicles. BRP’s expected earnings and sales growth for fiscal 2023 is 9% and 25%, respectively. The Zacks Consensus Estimate for fiscal 2023 earnings has improved 7% over the past 60 days.
Indiana-based Wabash is one of the leading manufacturers of semi-trailers in North America. Wabash’s expected earnings and sales growth for 2022 is 230.4% and 35.2%, respectively. The Zacks Consensus Estimate for 2022 earnings has been revised upward by 9 cents over the past seven days.
Charlotte-based Driven Brands is an automotive services company, offering consumer and commercial automotive repair and maintenance needs. DRVN’s expected earnings and sales growth for 2022 is 26% and 32%, respectively. The Zacks Consensus Estimate for 2022 earnings has moved north by 2 cents over the past seven days.