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Adient (ADNT) Q3 Earnings & Revenues Top Estimates, Down Y/Y

Zacks Equity Research

Adient PLC ADNT reported adjusted earnings per share of 38 cents in the third quarter of fiscal 2019, which beat the Zacks Consensus Estimate of 31 cents. The adjusted bottom-line figure in the year-ago quarter was $1.45.

Reportedly, quarterly net loss came in at $321 million against net income of $54 million in the prior-year quarter.

During the quarter under review, the company generated net sales of $4.2 billion, down from $4.5 billion in third-quarter fiscal 2018. However, the top line surpassed the Zacks Consensus Estimate of $4.1 billion.

During the reported quarter, net sales in the Seat Structures & Mechanisms (SS&M) segment totaled $1.86 billion, down from $2.40 billion in third-quarter fiscal 2018. Further, the Interior segment generated net sales of $1.75 billion, down from $2.35 billion in the prior-year quarter.

Segment Results

During fiscal third quarter, the company realigned its organizational structure to manage business on the basis of geographical regions. 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 generated adjusted EBITDA of $69 million in third-quarter fiscal 2019 compared with $99 million recorded in the prior-year quarter. The plunge was caused by negative business performance, mix and higher SG&A costs.

In EMEA, Adient’s quarterly adjusted EBITDA was $53 million compared with $97 million in the prior-year quarter. The downside was due to lower volume, negative impact of foreign currencies and product launch inefficiencies.

In Asia, the company’s quarterly adjusted EBITDA was $110 million compared with $146 million in the third quarter of fiscal 2018. The decline was caused by lower volume and equity income.

Adient PLC Price, Consensus and EPS Surprise

 

Adient PLC Price, Consensus and EPS Surprise

Adient PLC price-consensus-eps-surprise-chart | Adient PLC Quote

 

Financials

Adient had cash and cash equivalents of $1.02 billion as of Jun 30, 2019 compared with $687 million as of Sep 30, 2018. As of the same date, net debt amounted to $2.75 billion, up from $2.74 billion as of Sep 30, 2018.

In the third quarter, cash inflow by operating activities was $266 million compared with $390 million in the same period of fiscal 2018. Capital expenditure declined to $98 million from $138 million recorded in the prior-year quarter.

Zacks Rank & Stocks to Consider

Currently, Adient has a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the auto space are Fox Factory Holding Corp FOXF, CarMax, Inc KMX and Gentex Corporation GNTX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fox Factory has an expected long-term growth rate of 16.7%. In the past year, shares of the company have rallied 17%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 13.6%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 13.9%.

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