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Adient (ADNT) Beats on Q3 Earnings & Sales, Revises FY22 View

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Adient (ADNT - Free Report) reported adjusted earnings per share of 8 cents in the third quarter of fiscal 2022. The Zacks Consensus Estimate was pegged at a loss of 2 cents. The bottom line reversed from the year-ago loss of 53 cents per share. The outperformance stemmed from higher-than-anticipated sales from the Americas and Asia segments and profitability in the Americas and EMEA segments.

In the reported quarter, Adient generated net sales of $3,485 million, up 7.5% from $3,242 million recorded in the prior-year period and surpassed the Zacks Consensus Estimate of $3,374 million.

Adient Price, Consensus and EPS Surprise

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 $1,673 million, increasing 16.2% from the year-ago period and topping the consensus metric of $1,565 million. The segment posted adjusted EBITDA of $70 million, shooting up 204.3% from the prior-year period. The increase was driven by improved volume and mix resulting from modestly improved customer production schedules, improved business performance and favorable net commodities and forex. The figure also topped the consensus metric of $48.54 million.

In the fiscal third quarter, the EMEA segment registered revenues of $1,215 million, declining 8.5% year over year and lagging the consensus mark of $1,262 million. However, the segment recorded $31 million in EBITDA in the quarter under review, soaring 40.9% and topping the consensus mark of $21.94 million. Favorable commodity recoveries and an improvement in equity income led to the increase.

In the reported quarter, revenues in the Asia segment came in at $627 million, up 21.5% year over year and topping the consensus mark of $581 million. The segment’s adjusted EBITDA came down 30.4% to $64 million and missed the consensus mark of $90 million. Lower equity income, unfavorable volume and mix stemming from rising COVID-19 infections in China and increased freight costs hurt EBITDA.

Financial Position

Adient had cash and cash equivalents of $892 million as of Jun 30, 2022, compared with $1,521 million on Sep 30, 2021. Long-term debt amounted to $2,707 million in the reported quarter, down from $3,512 million. Capital expenditure totaled $53 million in the fiscal third quarter of 2022 compared with $60 million in the prior-year quarter. Selling, general and administrative expenses rose to $142 million in the quarter from $136 million in the year-ago period.

Outlook

The company has revised its fiscal 2022 projections. It now envisions revenues of $14 billion, down from the prior forecast of $14.2 billion. Adjusted EBITDA forecast is in the range of $640-$660 million compared with the prior estimation of a decline of more than $100 million from the year-ago level. Expected equity income has been upwardly revised to $85 million from the prior estimation of $75 million. Capital expenditure has been brought down to the range of $250-$275 million from the prior range of $300-$325 million.

Zacks Rank & Key Picks

ADNT 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 declined 10% 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 21% over the past year.

Tesla has an expected earnings growth rate of 74.6% 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 risen 20% in the past year.


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