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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
Referenced Stocks: AXL

American Axle reported earnings of $0.63 in the third-quarter 2014, in line with the Zacks Consensus Estimate and 50% better than the third quarter of 2013. The year-over-year improvement was driven by strong cash flow and enhanced profits, backed by improved sales, productivity and operational stability. Revenues increased 15.8% to $950.8 million, marginally surpassing the Zacks Consensus Estimate of $949 million. American Axle is poised to benefit from its backlog of new and incremental business, along with its efforts to increase non-GM sales. However, pricing pressure by original equipment manufacturers and high dependence on GM remain concerns. Thus, we are maintaining a Neutral recommendation on American Axle.


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. It 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 the sales are of light trucks.

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