Adient plc
ADNT
reported an adjusted loss per share of 38 cents in the first quarter of fiscal 2022. The Zacks Consensus Estimate was pegged at earnings of 8 cents. The bottom line also compared unfavorably with the year-ago earnings of $1.71 per share. This downside stemmed from declining profitability across all the segments.
In the reported quarter, Adient generated net sales of $3,480 million, down from $3,848 million recorded in the prior-year period. The top line, however, surpassed the Zacks Consensus Estimate of $3,381.5 million.
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 $1,498 million, declining from $1,737 million generated in the year-ago period. The segment posted adjusted EBITDA of $9 million in the quarter, falling steeply from $132 million recorded in the prior-year period. The decrease was due to lower volume and mix, supply chain disruptions and increased freight costs.
In the fiscal first quarter, the EMEA segment registered revenues of $1,230 million, declining from $1,604 in the year-ago quarter. The segment recorded $43 million in EBITDA in the quarter under review, down from $114 million. Lower volumes and equity income, operating inefficiencies and higher freight costs resulted in bleak results.
In the December quarter, revenues in the Asia segment came in at $784 million, up from $554 million generated in the year-ago quarter. The segment’s adjusted EBITDA was $114 million, decreasing from $151 million. Increased freight, launch costs and the adverse impacts of the Malaysia flood offset improvements in volume mix and hurt EBITDA.
Financial Position
Adient had cash and cash equivalents of $2,080 million as of Dec 31, 2021, compared with $1,521 million on Sep 30, 2021. Long-term debt amounted to $3,482 million in the reported quarter, slightly down from $3,512 million. Capital expenditure decreased to $60 million in the fiscal first quarter from $71 million recorded in the prior-year period.
Outlook
As anticipated, the ongoing macro headwinds in the form of supply chain disruptions and inflationary pressures on commodities, freight and energy are likely to affect the company significantly, especially in the first half of 2022. The company has kept most of its 2022 guidance unchanged. Expected revenues are constant at $14.8 billion, and capital expenditure remains in the range of $300-$325 million. Expected equity income has been increased to $90 million from the prior estimation of $80-$90 million.
Zacks Rank & Key Picks
Currently, Adient has a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are
Goodyear Tire
GT
and
Tesla
TSLA
, each sporting a Zacks Rank #1 (Strong Buy) and
Genuine Parts
GPC
, carrying a Zacks Rank #2 (Buy) currently. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Goodyear has an expected earnings growth rate of 51.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 1.1% upward over the past 60 days.
Goodyear’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. GT pulled off a trailing four-quarter earnings surprise of 228.5%, on average. The stock has also rallied 65.2% over a year.
Tesla has an expected earnings growth rate of 35.21% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 5% upward over the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 25.38%, on average. The stock has also rallied 6.9% over a year.
Genuine Parts has an expected earnings growth rate of 10.61% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised around 2.5% upward over the past 60 days.
Genuine Parts’ earnings beat the Zacks Consensus Estimate in all the trailing four quarters. GPC pulled off a trailing four-quarter earnings surprise of around 16%, on average. The stock has also rallied 25.4% over a year.
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