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American Axle (AXL) Q4 Earnings Beat Estimates, Down Y/Y

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American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) posted adjusted earnings of 45 cents per share in the fourth quarter, beating the Zacks Consensus Estimate of 43 cents. In fourth-quarter 2017, adjusted earnings were 89 cents.

During the quarter under review, the company reported net loss of $361.8 million or loss of $3.24 per share against net income of $106.3 million or 93 cents per share in the year-ago quarter.

Revenues decreased to $1.69 billion from the year-ago figure of $1.73 billion. The top line slightly surpassed the Zacks Consensus Estimate of $1.68 billion.

American Axle’s SG&A (Selling, General & Administrative) expenses were $97.1 million for fourth-quarter 2018 in comparison with $101 million in the prior-year quarter.

Gross profit decreased to $225.3 million in fourth-quarter 2018 from $294.3 million in the year-ago quarter. Operating loss during the reported quarter was $394.3 million against operating income of $148.6 million in fourth-quarter 2017.

2018 Results

For 2018, American Axle reported earnings of $3.28 per share, down from the 2017 figure of $3.75.

Net sales in 2018 were $7.27 billion, up from $6.27 billion in 2017.

Financial Position

American Axle had cash and cash equivalents of $476.4 million as of Dec 31, 2018, up from $376.8 million as of Dec 31, 2017. Net long-term debt was $3.7 billion as of Dec 31, 2018, compared with $4 billion as of Dec 31, 2017.

Cash flow from operations for the three months ending Dec 31, 2018, was $258.3 million in comparison with $226.3 million recorded in the prior-year period. For the three months ending, Dec 31, 2018, American Axle’s adjusted free cash inflow was $142.4 million compared with an inflow of $50.9 million for the three months ending, Dec 31, 2017.

Outlook

For 2019, the company expects sales of $7.3-$7.4 billion.

American Axle anticipates adjusted earnings before income taxes, depreciation and amortization (EBITDA) of $1.20-$1.25 billion. The company set adjusted free cash flow target of $350-$400 million for 2019.
 
Zacks Rank & Other Key Picks

American Axle currently carries a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks in the auto space are Oshkosh Corp. (OSK - Free Report) , General Motors Company (GM - Free Report) and AB Volvo (VLVLY - Free Report) . While Oshkosh currently sports a Zacks Rank #1, General Motors and Volvo carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oshkosh has an expected long-term growth rate of 11.3%. Over the past three months, shares of the company have surged 19.2%.

General Motors has an expected long-term growth rate of 8.5%. Over the past three months, shares of the company have risen 9.6%.

Volvo has an expected long-term growth rate of 5%. Over the past three months, shares of the company have risen 5.7%.

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