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American Axle (AXL) Q2 Earnings Miss Estimates, Down Y/Y

Zacks Equity Research

American Axle & Manufacturing Holdings, Inc. AXL posted adjusted earnings of 55 cents per share in the second quarter of 2019, missing the Zacks Consensus Estimate of 59 cents. In second-quarter 2018, adjusted earnings were $1.23.

In the quarter under review, the company reported net income of $52.7 million compared with $151.3 million a year ago.

Sales declined to $1.70 billion from the year-ago figure of $1.91 billion. The top line missed the Zacks Consensus Estimate of $1.8 billion.

American Axle’s SG&A (selling, general & administrative) expenses were $91.3 million for second-quarter 2019 in comparison with $95 million in the prior-year quarter.

Gross profit moved down to $248.3 million in second-quarter 2019 from $331.4 million a year ago. Operating income declined to $119.9 million from $190.3 million.

American Axle & Manufacturing Holdings, Inc. Price, Consensus and EPS Surprise

 

American Axle & Manufacturing Holdings, Inc. Price, Consensus and EPS Surprise

American Axle & Manufacturing Holdings, Inc. price-consensus-eps-surprise-chart | American Axle & Manufacturing Holdings, Inc. Quote

Financial Position

American Axle had cash and cash equivalents of $248.8 million as of Jun 30, 2019, down from $476 million as of Dec 31, 2018. Net long-term debt was $3.7 billion as of Jun 30, 2019, similar to the figure recorded on Dec 31, 2018.

For the three months ending Jun 30, 2019, the company’s adjusted free cash outflow was $119.3 million compared with $100.3 million for the same period of last year.

Outlook

For 2019, the company expects sales of $6.9-$7 billion, down from the previously mentioned $7.3-$7.4 billion. Also, its adjusted EBIDTA is now projected to be $1.05-$1.10 billion, down from the previous guidance of $1.2-$1.25 billion.

Zacks Rank & Stocks to Consider

Currently, American Axle has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the auto space are Copart, Inc. CPRT, CarMax, Inc. KMX and Gentex Corporation GNTX. While Copart currently sports a Zacks Rank #1 (Strong Buy), CarMax and Gentex carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Copart has an expected long-term growth rate of 20%. In the past year, shares of the company have rallied 30.1%.

CarMax has an expected long-term growth rate of 12.6%. In the past year, shares of the company have moved up 14%.

Gentex has an expected long-term growth rate of 5%. In the past year, shares of the company have returned 15.5%.

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