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Aptiv's (APTV) Q3 Earnings Match Estimates, Revenues Lag

Zacks Equity Research

Aptiv PLC's APTV third-quarter 2019 earnings came in line with the Zacks Consensus Estimate but revenues missed the same.

Adjusted earnings of $1.27 per share increased 2.4% year over year and came at lower end of the guidance of $1.27-$1.33 per share.

Revenues of $3.56 billion missed the consensus mark by $47 million but increased 2.1% year over year. Revenues came in below the guidance of $3.60-$3.70 billion.

So far this year, shares of Aptiv have gained 48%, outperforming the 10.9% rally of the industry it belongs to.


Quarterly Numbers in Detail

Revenues in the Signal and Power Solutions segment totaled $2.58 billion, up 2% on a year-over-year basis and contributed 73% to total revenues. Advanced Safety and User Experience revenues of $985 million were up 3% year over year and contributed 27% to total revenues.

Adjusted operating income of $410 million fell 2.4% year over year. Adjusted operating income margin declined to 11.5% from 12.1% in the prior-year quarter due to unfavorable impacts of GM labor strike, partially offset by higher sales growth.

Aptiv exited the quarter with cash and cash equivalents balance of $341 million compared with $365 million at the end of the prior quarter. Long-term debt was $3.9 billion, compared with $4 million in the prior quarter.

Total available liquidity at the end of the quarter was $2.3 billion compared with $2.2 billion at the end of the prior quarter. Net cash provided by operating activities was $325 million and capital expenditures were $168 million in the quarter.

During the third quarter, Aptiv returned $100 million to shareholders through share repurchases and dividends. The company repurchased 0.5 million shares for roughly $44 million and paid out $56 million in dividend payments.

2019 Guidance

The company expects adjusted earnings in the range of $4.62-$4.68 per share, below the Zacks Consensus estimate of $5.05.

Net sales are anticipated between $14.255 billion and $14.355 billion, below the Zacks Consensus Estimate of $14.57 billion.

Adjusted operating income is expected in the range of $1,525-$1,545 million. Adjusted operating income margin is anticipated between 10.7% and 10.8%. The company expects capital expenditures of $800 million and adjusted effective tax rate between 12 and 13% for the year.

Zacks Rank & Stocks to Consider

Currently, Aptiv carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are FleetCor FLT, S&P Global SPGI and Paychex PAYX, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings (three to five years) growth rate for FleetCor, S&P Global and Paychex is estimated at 15.6%, 10% and 7%, respectively.

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