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Why Is American Axle (AXL) Down 6.6% Since the Last Earnings Report?
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It has been about a month since the last earnings report for American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
American Axle Q1 Earnings Top, Revenues Miss Estimates
American Axle posted adjusted earnings of $1.03 per share for the first quarter, outperforming the Zacks Consensus Estimate of $0.91. Earnings increased from $0.78 recorded in the first quarter of 2016.
The company reported net income of $78.4 million or $0.99 per share in the first quarter of 2017 compared with $61.1 million or $0.78 in the year-ago quarter.
Revenues increased to $1.05 billion in the reported quarter from the year-ago figure of $0.97 billion. However, the top line fell short of the Zacks Consensus Estimate of $1.06 billion.
American Axle’s content-per-vehicle — dollar value of product sales supporting customers’ North American light truck and sport utility vehicle (SUV) programs — came in at $1,630 from $1,611 in first-quarter 2016. For the reported period, the company’s SG&A and R&D spending were $82.8 million and $41 million, respectively.
Gross profit increased to $210.7 million (20.1% of sales) in first-quarter 2017 from $174 million (18% of sales) in the prior-year quarter. Operating income increased to $111.9 million from $98.4 million a year ago.
Financial Position
American Axle had cash and cash equivalents of $1.5 billion as of Mar 31, 2017, up from $481.2 million as of Dec 31, 2016. Long-term debt was $2.58 billion as of Mar 31, 2017 compared with $1.4 billion at the end of 2016.
Cash flow from operations in first-quarter 2017 was $62.3 million. For the same quarter, net capital spending of the company was $34.1 million. American Axle’s free cash flow for the first quarter was $28.2 million, whereas adjusted free cash flow for the same period was $60.5 million, excluding the impact of cash payments for restructuring and acquisition-related costs and settlements of pre-existing accounts payable balances with acquired entities.
2017 Outlook
For fiscal 2017, sales are expected to be approximately $6.1 billion, higher than $3.95 billion recorded in 2016. The sales expectation is based on the launch of programs in the company’s new and incremental business backlog. The company also assumes that the U.S. industry sales on a seasonally adjusted annualized rate (SAAR) basis will be around 17.5 million light vehicle units in 2017.
Earnings before income taxes, depreciation and amortization (EBITDA) margin will likely be in the range of 17–18% in 2017. American Axle expects adjusted free cash to be approximately 5% of sales in 2017. In addition, capital spending will be around 8% of sales this year.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to four lower.
American Axle & Manufacturing Holdings, Inc. Price and Consensus
At this time, the stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is American Axle (AXL) Down 6.6% Since the Last Earnings Report?
It has been about a month since the last earnings report for American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
American Axle Q1 Earnings Top, Revenues Miss Estimates
American Axle posted adjusted earnings of $1.03 per share for the first quarter, outperforming the Zacks Consensus Estimate of $0.91. Earnings increased from $0.78 recorded in the first quarter of 2016.
The company reported net income of $78.4 million or $0.99 per share in the first quarter of 2017 compared with $61.1 million or $0.78 in the year-ago quarter.
Revenues increased to $1.05 billion in the reported quarter from the year-ago figure of $0.97 billion. However, the top line fell short of the Zacks Consensus Estimate of $1.06 billion.
American Axle’s content-per-vehicle — dollar value of product sales supporting customers’ North American light truck and sport utility vehicle (SUV) programs — came in at $1,630 from $1,611 in first-quarter 2016. For the reported period, the company’s SG&A and R&D spending were $82.8 million and $41 million, respectively.
Gross profit increased to $210.7 million (20.1% of sales) in first-quarter 2017 from $174 million (18% of sales) in the prior-year quarter. Operating income increased to $111.9 million from $98.4 million a year ago.
Financial Position
American Axle had cash and cash equivalents of $1.5 billion as of Mar 31, 2017, up from $481.2 million as of Dec 31, 2016. Long-term debt was $2.58 billion as of Mar 31, 2017 compared with $1.4 billion at the end of 2016.
Cash flow from operations in first-quarter 2017 was $62.3 million. For the same quarter, net capital spending of the company was $34.1 million. American Axle’s free cash flow for the first quarter was $28.2 million, whereas adjusted free cash flow for the same period was $60.5 million, excluding the impact of cash payments for restructuring and acquisition-related costs and settlements of pre-existing accounts payable balances with acquired entities.
2017 Outlook
For fiscal 2017, sales are expected to be approximately $6.1 billion, higher than $3.95 billion recorded in 2016. The sales expectation is based on the launch of programs in the company’s new and incremental business backlog. The company also assumes that the U.S. industry sales on a seasonally adjusted annualized rate (SAAR) basis will be around 17.5 million light vehicle units in 2017.
Earnings before income taxes, depreciation and amortization (EBITDA) margin will likely be in the range of 17–18% in 2017. American Axle expects adjusted free cash to be approximately 5% of sales in 2017. In addition, capital spending will be around 8% of sales this year.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been two revisions higher for the current quarter compared to four lower.
American Axle & Manufacturing Holdings, Inc. Price and Consensus
American Axle & Manufacturing Holdings, Inc. Price and Consensus | American Axle & Manufacturing Holdings, Inc. Quote
VGM Scores
At this time, the stock has a nice Growth Score of 'B', though it is lagging a lot on the momentum front with a 'F'. However, the stock was allocated a grade of 'A' on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.