American Axle (AXL) Fourth Quarter Earnings and Sales Lag Estimates, Down Year-over-Year – February 14, 2022

American axles and manufacturing holdings (AXIS Free Report) suffered a loss of 9 cents per share in the fourth quarter of 2021. Zacks’ consensus estimate was pegged to a profit of 4 cents. Net income fell 118% from the 51 cents per share earned a year ago. The company generated quarterly revenue of $1,235.1 million, lagging Zacks’ consensus estimate of $1,289.1 million. Revenue was down 14.1% year-on-year, mainly due to the unfavorable impact of the shortage of semiconductor chips.

Sector performance

In the quarter under review, the Driveline segment recorded sales of $913 million, down 11.3% year-on-year. The sector recorded adjusted EBITDA of $127.5 million, down 23.1%.

The company’s Metal Forming business generated revenue of $410.1 million in the fourth quarter, down 23% from the year-ago figure. The segment recorded adjusted EBITDA of $37.1 million, down 61.2%.

Financial situation

American Axle’s fourth-quarter SG&A expenses totaled $77.5 million, down from $83.3 million incurred in the year-ago quarter.

For the three months ended December 31, 2021, the company posted adjusted free cash flow (FCF) of $43.6 million, down sharply from the FCF of $172.7 million recorded during the year. period of the previous year. Capital expenditures for the quarter were $65.2 million, down from $69.2 million.

As of December 31, 2021, American Axle had cash and cash equivalents of $530.2 million, compared to $557 million as of December 31, 2020. Its long-term net debt was $3,085.7 million, compared to $3,441.3 million as of December 31, 2020.

Outlook

American Axle forecasts 2022 revenue in the range of $5.6-5.9 billion, which includes an additional $150-200 million increase in client impacts in the index-linked metals market and foreign currencies compared to 2021. The adjusted EBITDA estimate is around $800. -875 million dollars. Adjusted FCF is expected to be between $300 million and $375 million, taking into account capital expenditures of between 3.5% and 4% of sales.

Zacks ranking and key picks

Currently, American Axle has a Zacks rank of #5 (high selling).

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Sallie R. Loera