American Axle and Manufacturing Inc. (AXL) reported earnings of $18.6 million or 23 cents per share before debt refinancing and redemption costs in the first quarter of the year that plunged 62.3% from 61 cents per share in the comparable quarter of 2012 (excluding special items). Nevertheless, earnings surpassed the Zacks Consensus Estimate of 15 cents during the quarter.
On a reported basis, net earnings were $7.3 million or 10 cents per share in the quarter versus $51.2 million 68 cents in the first quarter of 2012.
Revenues were almost flat at $755.6 million compared with $751.5 million in the first quarter of 2012 and missed the Zacks Consensus Estimate of $757 million. The company’s revenues reflect the adverse impact of roughly $12.5 million related to the labor strike at General Motors’ (GM) Rayong plant in Thailand.
American Axle’s content-per-vehicle – dollar value of its product sales supporting GM’s North American light truck and SUV programs and Chrysler's heavy duty Dodge Ram pickup trucks – increased 2.0% to $1,504 from $ $1,475 in the first quarter of 2012.
However, the company witnessed a reverse trend in diversification of its customer base during the quarter. The company’s non-GM sales decreased 2.8% to $188.1 million from $193.6 million in the year-ago quarter.
Gross profit dipped 25.1% to $104.3 million or 13.8% of sales from $139.2 million or 18.5% in the first quarter in 2012. Meanwhile, operating income slashed 42.2% to $44.7 million or 5.9% of sales from $77.4 million or 10.3% a year ago.
American Axle had cash and cash equivalents of $100.8 million as of Mar 31, 2013, up from $62.4 million as of Dec 31, 2012. Long-term debt increased to $1.6 million as of Mar 31, 2013 compared with $1.5 billion as of Dec 31, 2012.
The company had lower operating net cash flow use of $26.8 million compared with $71.5 million in the first quarter of 2012. Net capital spending of the company was $47.8 million compared with $43.6 million in the same period of 2012. Therefore, American Axle had narrower free cash flow use of $70.7 million in the quarter compared to the use of $115.1 million in the corresponding period in 2012.
American Axle is a leading supplier of driveline systems, modules and components for the light vehicle market. The company makes axles, driveshaft and chassis components for light trucks, sport utility vehicles and passenger cars.
The company with its numerous new global product and process launches featuring advanced driveline technology, and customer diversification expects to grow in the future. Currently, it retains a Zacks Rank #3 (Hold).
Other stocks that are performing well in the industry include Visteon Corp. (VC) and STRATTEC Security Corp. (STRT). They carry a Zacks Rank #1 (Strong Buy).
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