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American Axle & Manufacturing Holdings Inc. (AXL): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Posted
2/11/2014 7:00:00 AM
By: Zacks.com
Referenced Stocks:AXL

Summary:
American Axle reported earnings of $0.44 per share in the first quarter of 2014, surpassing the Zacks Consensus Estimate of $0.40. Revenues went up 13.7% to $858.8 million, outpacing the Zacks Consensus Estimate of $853 million. The year-over-year improvement in revenues was driven by higher sales of Chrysler's all-new Jeep Cherokee and heavy-duty Ram full-size pickup trucks and its derivatives. The company is focused on the launch of new business backlog, which is likely to prove profitable, improve free cash flow generation and enhance business diversification. However, pricing pressure by original equipment manufacturers (OEMs) remain a concern. Therefore, we have maintained a Neutral recommendation on AXL.

Overview:

American Axle & Manufacturing Holdings, Inc. (AXL) is a leading supplier of driveline systems, modules and components for the light vehicle market. The company makes axles, driveshafts and chassis components for light trucks, sport utility vehicles (SUVs) and passenger cars. The company has a 38% share of the driveshaft market in the U.S. and an 11% share across the world. Driveline systems are components that transfer power from the engine to the driving wheels of a vehicle.

The principal manufacturing facilities of American Axle are located in the U.S. (Michigan, New York and Ohio), Brazil, Mexico, Germany, India, China, Japan and the U.K. Its major customers include General Motors and Chrysler. The North American market alone accounts for about 91% of annual revenues. Among the company's diverse products, rear and front axles as well as driveshafts contribute about 82% to annual sales, while drivetrain components, forged products, and others generate the remaining 18%. About two-thirds of sales are of light trucks.


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