A month has gone by since the last earnings report for Aptiv (APTV - Free Report) . Shares have lost about 13.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Aptiv due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Aptiv Surpasses Q1 Earnings & Revenues Estimates
Aptiv PLC posted better-than-expected first-quarter 2019 results.
Adjusted earnings of $1.05 per share surpassed the Zacks Consensus Estimate by 5 cents but fell below the year-ago quarter by 24 cents. The reported figure exceeded the guided range of 97 cents -$1.02 per share. Revenues of $3.58 billion beat the consensus mark by $113 million but decreased 1.5% year over year. Revenues exceeded the guided range of $3.40-$3.50 billion.
Quarterly Numbers in Detail
Revenues in the Signal and Power Solutions segment totaled $2.56 billion, down 2% on a year-over-year basis and contributing 72% to total revenues. Advanced Safety and User Experience revenues of $1.02 billion declined 1% year over year and contributed 28% to total revenues.
Adjusted operating income of $345 million fell 19.2% year over year. Adjusted operating income margin declined to 9.7% from 11.8% in the prior-year quarter due to the unfavorable impacts of foreign currency exchange, vehicle production declines in China and continued incremental investments for growth, which were partially offset by higher sales growth.
Aptiv exited first-quarter 2019 with cash and cash equivalents balance of $321 million compared with $567 million at the end of prior quarter. Long-term debt was $3.99 billion compared with $4.04 billion at the end of prior quarter.
Total available liquidity at the end of the quarter was $2.1 billion compared with $2.6 billion at the end of the prior quarter. Net cash provided by operating activities was $84 million and capital expenditures were $235 million in the quarter.
During the first quarter of 2019, Aptiv returned $283 million to shareholders through share repurchases and dividends. The company repurchased 2.84 million shares for $226 million and paid $57 million in dividend payments.
For second-quarter 2019, Aptiv projects adjusted earnings in the range of $1.11-$1.17 per share. The current Zacks Consensus Estimate of $1.37 lies above the guided range. Net sales are expected in the range of $3.60-$3.70 billion. The current Zacks Consensus Estimate of $3.75 billion lies above the guided range. Adjusted operating income is expected in the range of $375-$395 million. Adjusted operating income margin is anticipated between 10.4-10.7%. Adjusted effective tax rate is expected between 15-16%.
For the full year, Aptiv lowered its guidance for adjusted EPS, net sales and adjusted EBITDA. The company now expects adjusted earnings in the range of $4.90-$5.10 per share compared with the prior guided range of $5.25-$5.45. The current Zacks Consensus Estimate is pegged at $5.34. Net sales are now anticipated between $14.4 billion and $14.8 billion compared with the prior range of $14.6-$15.0 billion. The current Zacks Consensus Estimate of $14.9 billion lies within the guided range.
Adjusted operating income is now expected in the range of $1.63-$1.71 billion compared with the previously guided range of $1.72-$1.80 billion. Adjusted operating income margin is now anticipated between 11.3-11.5% compared with the previously guided range of 11.8-12%. The company continues to expect capital expenditures of $800 million and adjusted effective tax rate between 15-16% for the full year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -16.94% due to these changes.
Currently, Aptiv has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Aptiv has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.