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American Axle (AXL) Q2 Earnings & Revenues Beat Estimates

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American Axle & Manufacturing Holdings (AXL - Free Report) reported earnings of 22 cents per share in second-quarter 2022, beating the Zacks Consensus Estimate of 12 cents. Higher-than-anticipated sales from the Driveline and the Metal Forming segments resulted in the outperformance. The bottom line decreased 24.1% from 29 cents a share earned a year ago. The company generated quarterly revenues of $1,438.3 million, surpassing the Zacks Consensus Estimate of $1,373 million. Revenues increased 12.1% on a year-over-year basis, led by favorable impacts of supply chain improvements, volume and mix and the Tekfor acquisition.

Segmental Performance

In the reported quarter, the Driveline segment recorded sales of $1,040.7 million, rising 11.3% year over year and beating the Zacks Consensus Estimate of $943 million. The segment registered adjusted EBITDA of $141.4 million, down 6.5% but beating the consensus mark of $116 million.

The company’s Metal Forming business generated revenues of $512.9 million during the quarter, an increase of 16.5% from the year-ago figure. It crossed the consensus estimate of $460 million. The segment witnessed adjusted EBITDA of $53.7 million, falling 24.7% and lagging the consensus mark of $73 million.

Financial Position

American Axle’s second-quarter SG&A expenses totaled $84.8 million, down from $86.2 million incurred in the prior-year quarter.

In the three months ended Jun 30, 2022, the company posted an adjusted free cash flow of $114.3 million, falling from $136.1 million recorded in the year-earlier period. Capital spending in the quarter came in at $42.6 million, up from $41.2 million. Net cash provided by operating activities was $146.7 million in the quarter, declining from $167.1 million in the year-ago period.

In the quarter, American Axle had cash and cash equivalents of $501.4 million compared with $530.2 million on Dec 31, 2021. Its net long-term debt was $3,034.8 million, down from $3,085.7 million as of Dec 31, 2021.

2022 Outlook Revised

American Axle updated its outlook for 2022. It now envisions revenues for 2022 in the range of $5.75-$5.95 billion instead of the previous guidance of $5.6-$5.8 billion. Estimation for adjusted EBITDA is now in the range of $790-$830 million, up from $785-$830 million projected earlier. Adjusted FCF remains unchanged in the band of $300-$350 million, considering capital spending between 3.5% and 4% of sales. The outlook takes into account the acquisition of Tekfor Group, which became effective on Jun 1, 2022, with cost synergies on track for 2023.

Zacks Rank & Key Picks

AXL carries a Zacks Rank #3 (Hold), currently.

Better-ranked players in the auto space include Harley-Davidson (HOG - Free Report) , Genuine Parts Company (GPC - Free Report) and Tesla Inc. (TSLA - Free Report) , each carrying a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Harley-Davidson has an expected earnings growth rate of 6.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 7% upward in the past 30 days.

Harley-Davidson’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. HOG pulled off a trailing four-quarter earnings surprise of 49.52%, on average. The stock has risen 1.4% in the past year.

Genuine Parts has an expected earnings growth rate of 15% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 1.3% upward in the past 30 days.

Genuine Parts’ earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of 11.03%, on average. The stock has risen 8.3% over the past year.

Tesla has an expected earnings growth rate of 74.63% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 6.7% upward in the past 30 days.

Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 32.17%, on average. The stock has decreased 17.5% in the past year.