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American Axle (AXL) Q2 Earnings Top, Revenues Plunge 68% Y/Y

American Axle & Manufacturing Holdings, Inc. AXL posted second-quarter 2020 adjusted loss of $1.79 per share, narrower than the Zacks Consensus Estimate of a loss of $2.06 on higher-than-anticipated revenues. Last year, the firm posted profits of 55 cents a share.

The Detroit-based global automotive parts supplier reported revenues of $555 million, which beat the Zacks Consensus Estimate of $411 million. Revenues, however, nosedived 69.7% from the year-ago figure of $1,704.3 million.

The dismal year-over-year performance is attributed to coronavirus-led demand. Per the company, coronavirus woes impacted sales to the tune of $947 million for the quarter under review.

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

Key Takeaways

The firm’s Driveline segment recorded sales of $403.7 million, down 65.8% year over year. The unit posted a negative EBITDA of $31.2 million against a positive EBITDA of $162.1 million in the prior-year quarter.

The company’s Metal Forming business generated revenues of $150.3 million, which plunged from the year-ago figure of $484.2 million. The segment incurred a loss of $20.9 million against the prior year’s income of $86.5 million.

American Axle’s second-quarter 2020 SG&A (selling, general & administrative) expenses totaled $73.8 million, down from $91.3 million incurred in the prior-year period.

For the three-month period ended Jun 30, 2020, the company posted negative adjusted free cash flow (FCF) of $161.8 million versus positive adjusted FCF of $119.3 million in the year-earlier period. Capital spending for the quarter came in at $35 million, down from the year-ago period’s $111.9 million.

As of Jun 30, 2020, American Axle had cash and cash equivalents of $893.3 million compared with $532 million on Dec 31, 2019. The company had net long-term debt of $3,561.4 million as of Jun 30, 2020, down from $3,612.3 million on Dec 31, 2019.

Amid COVID-19-led uncertainty, American Axle has refrained from providing any guidance for full-year 2020.

Zacks Rank & Stocks to Consider

American Axle currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector include Garrett Motion Inc GTX, Strattec Security Corporation STRT and Wabash National Corporation WNC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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