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Adient (ADNT) Tops Q1 Earnings & Sales Estimates, Scraps View

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Adient PLC (ADNT - Free Report) reported adjusted earnings per share of 62 cents in second-quarter fiscal 2020, beating the Zacks Consensus Estimate of 32 cents. The figure was also higher than the year-ago quarter’s 31 cents. Theupside mainly resulted from better-than-expected performance in the company’s EMEA and Asia segments.

During the reported quarter, Adient generated net sales of $3,511 million, down from $4,228 million in second-quarter fiscal 2020. However, the top line surpassed the Zacks Consensus Estimate of $3,497 million.

During the fiscal second quarter, net sales in the Seat Structures & Mechanisms business totaled $1,214 million, down from $1,920 million reported in second-quarter fiscal 2019 mainly due to lower vehicle production in China.

Adient PLC Price, Consensus and EPS Surprise

 

Segment Results

Adient currently operates through three reportable segments — Americas, which includes North America and South America; Europe, Middle East, and Africa (EMEA); and Asia Pacific/China (Asia).

In the Americas, the company recorded revenues of $1,641 million, down 14.3% year over year. The metric also missed the Zacks Consensus Estimate of $1,779 million. Adient generated adjusted EBITDA of $106 million in the fiscal second quarter, indicating a rise from $34 million recorded in the prior-year period, primarily owing to lower launch costs combined with decreased SG&A costs and low commodity costs.

In EMEA, the company registered revenues of $1,488 million, down 16.3% year over year. However, it beat the Zacks Consensus Estimate of $1,385 million. Its quarterly adjusted EBITDA was $62 million compared with the prior-year quarter’s $59 million. Theupside resulted from lower launch costs along with decreased SG&A costs.

Revenues in the Asia segment were $444 million in the reported quarter compared with the year-earlier quarter’s $599 million. The metric, however, beat the Zacks Consensus Estimate of $413 million. The company’s adjusted EBITDA was $63 million compared with $123 million reported in second-quarter fiscal 2020 due to a significant reduction in China production volume amid the coronavirus crisis.

Financials

Adient had cash and cash equivalents of $1,640 million as of Mar 31, 2020,compared with $924 million as of Sep 30,2019. As of the same date, long-term debt amounted to $3,717 million, up from $3,708 billion as of Sep 30, 2019. Long-term debt-to-capital ratio stands at 70.7%. Capital expenditure declined to $94 million in the fiscal second quarter from $108 million recorded in the prior-year quarter.

Outlook

Adient scrapped the 2020 guidance as it expects the coronavirus pandemic’s impactstostrain its operations in the days to come.

Zacks Rank & Stocks to Consider

Adient currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector are Veoneer, Inc. (VNE - Free Report) , Unique Fabricating, Inc. (UFAB - Free Report) and Modine Manufacturing Company (MOD - Free Report) , each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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