Adient (ADNT) shares soared 6.7% in the last trading session to close at $18.80. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.8% gain over the past four weeks.Adient shares jumped after the company reported an adjusted EBITDA of $233 million for its fiscal second quarter, marking a 3% increase from the previous year. The company maintained its fiscal 2025 guidance, projecting consolidated sales of $13.9 billion and adjusted ...

Adient (ADNT) 2025 Conference June 11, 2025 11:10 AM ET Speaker0 Lively Speaker1 room. We're gonna play some music, pump it up. Yeah. I guess so. All right. Let's begin, shall we? Very pleased to welcome Adient to the Global Auto Conference joined here by the President and CEO Jerome Dorlak and CFO Mark Alswell. Thank you for joining us. Adient, for those of you are not familiar, is a leading global auto supplier with top market share positions in most regions. And to kick off, I think Jerome would like to ...

It has been about a month since the last earnings report for Adient (ADNT) . Shares have added about 14% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Adient due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving Since Then?It turns out, fre ...

Core Viewpoint - Adient plc is positioned to benefit from its diverse customer base and international presence, despite facing challenges such as high restructuring costs in Europe and uncertainty regarding year-end customer recoveries [1] Group 1: Market Position and Business Wins - Adient has established a strong market position through a broad range of products and a diverse customer base, which is expected to strengthen further [2] - In fiscal 2024, Adient secured new and renewal contracts totaling approximately $1 billion in annual revenues, with around 90% of these agreements involving local OEMs, many set to launch in fiscal years 2026 and 2027 [3] Group 2: Regional Performance and Strategy - The company is gaining momentum in the EMEA region, driven by restructuring benefits and securing key programs with European customers, while also developing opportunities with China-based OEMs [4] - Adient is focusing on enhancing efficiency by phasing out lower-performing segments and launching higher-margin programs expected to positively impact results in 2026 [4] Group 3: Innovations and Automation - Adient's initiatives in automation and modularity are yielding positive results, with automation reducing labor costs and improving quality, speed, and safety [5] - The implementation of AI-powered welding inspection and partnerships for 3D sewing automation are enhancing precision and reducing labor needs, differentiating Adient in supporting China OEMs expanding internationally [5] Group 4: Challenges and Financial Outlook - Sales in China are lagging, with revenues expected to remain stable or slightly decline in fiscal 2025 due to an unfavorable production mix [6] - Adient anticipates higher European restructuring costs and has revised its free cash flow outlook to $150-$170 million from a previous estimate of $180 million [6]

Core Insights - Adient reported adjusted earnings per share (EPS) of 69 cents for Q2 fiscal 2025, an increase from 54 cents in the same period last year, exceeding the Zacks Consensus Estimate of 36 cents [1] - The company generated net sales of $3.61 billion, a 4% decrease year over year, but above the Zacks Consensus Estimate of $3.47 billion [1] Segment Performance - The Americas segment achieved revenues of $1.70 billion, up 2.3% year over year, surpassing the Zacks Consensus Estimate of $1.59 billion, with adjusted EBITDA of $94 million, an increase from $80 million in the prior-year quarter [3] - The EMEA segment reported revenues of $1.23 billion, down 10.1% year over year, but exceeding the Zacks Consensus Estimate of $1.16 billion, with adjusted EBITDA of $50 million, down from $57 million in the previous year [4] - The Asia segment's revenues were $707 million, a decline from $742 million in the same quarter last year, missing the Zacks Consensus Estimate of $736 million, with adjusted EBITDA slightly down to $110 million from $112 million [4] Financial Position - As of March 31, 2025, Adient had cash and cash equivalents of $754 million, down from $945 million as of September 30, 2024, with long-term debt at $2.39 billion [5] - Capital expenditures totaled $109 million, compared to $124 million in the prior-year quarter [5] Guidance Updates - Adient maintains its fiscal 2025 revenue guidance at $13.9 billion and adjusted EBITDA at $850 million, with equity income projected at $80 million [6] - Free cash flow is now expected to be between $150 million and $170 million, down from a previous estimate of $180 million, with capital expenditures estimated at $285 million [7]

Financial Performance - Adient recorded net sales of $3,611 million for Q2 2025, a decrease of $139 million or 3.7% compared to Q2 2024, primarily due to lower production volumes in EMEA and China [114]. - Gross profit for Q2 2025 was $261 million, representing 7.2% of net sales, an increase from $230 million or 6.1% of net sales in Q2 2024, driven by favorable pricing adjustments [118]. - Net loss attributable to Adient was $335 million in Q2 2025, compared to a net loss of $70 million in Q2 2024, largely due to a non-cash goodwill impairment charge [133]. - Comprehensive loss attributable to Adient was $229 million in Q2 2025, an increase from $168 million in Q2 2024, primarily due to a higher net loss from the goodwill impairment [137]. - For the first six months of fiscal 2025, net loss attributable to Adient was $335 million, compared to a net loss of $50 million in the same period of fiscal 2024 [136]. - Comprehensive loss attributable to Adient was $454 million in the first six months of fiscal 2025, a significant increase from a loss of $10 million in the same period of fiscal 2024, primarily due to a non-cash goodwill impairment of $284 million in the EMEA reporting unit [138]. Segment Performance - Net sales for the Americas segment increased by 2% to $1,699 million in Q2 2025 compared to $1,660 million in Q2 2024, driven by favorable pricing adjustments and higher production volumes [150]. - Adjusted EBITDA for the Americas segment rose by 18% to $94 million in Q2 2025, up from $80 million in Q2 2024, reflecting improved pricing and production performance [150]. - EMEA segment net sales decreased by 10% to $1,231 million in Q2 2025, down from $1,370 million in Q2 2024, primarily due to lower production volumes and unfavorable currency impacts [154]. - Adjusted EBITDA for the EMEA segment fell by 12% to $50 million in Q2 2025, compared to $57 million in Q2 2024, impacted by lower production volumes and unfavorable product mix [154]. - Asia segment net sales decreased by 5% to $707 million in Q2 2025, down from $742 million in Q2 2024, due to lower production volumes in China [158]. - Adjusted EBITDA for the Asia segment declined by 2% to $110 million in Q2 2025, compared to $112 million in Q2 2024, affected by unfavorable production volumes and mix [158]. Costs and Expenses - Selling, general and administrative expenses rose by 25% to $144 million in Q2 2025, compared to $115 million in Q2 2024, largely due to third-party consulting costs [116]. - Cost of sales decreased by $170 million, or 5%, while gross profit increased by $31 million, or 13%, in Q2 2025 compared to Q2 2024 [120]. - For the first six months of fiscal 2025, cost of sales decreased by $305 million, or 4%, and gross profit increased by $1 million, less than 1%, compared to the same period in fiscal 2024 [121]. - SG&A expenses increased by $29 million, or 25%, in Q2 2025 compared to Q2 2024, primarily due to higher net engineering and administrative spending [122]. - Restructuring and impairment costs rose by $226 million in Q2 2025, mainly due to a $333 million impairment charge related to EMEA's goodwill [124]. Impairment and Goodwill - A non-cash goodwill impairment charge of $333 million was recognized in EMEA as of March 31, 2025, significantly impacting net loss attributable to Adient, which totaled $335 million for Q2 2025 [111][118]. - Adient recorded a non-cash goodwill impairment of $333 million in the EMEA reporting unit as of March 31, 2025, with no goodwill remaining in that unit [181]. - The Americas and Asia reporting units maintained goodwill of $604 million and $1,180 million, respectively, as of March 31, 2025 [182]. - The fair value of reporting units showed significant declines, with differences between fair values and carrying values exceeding 10% [181]. - An impairment charge of $10 million was recorded for the investment in Adient Aerospace during the first six months of fiscal 2025 [186]. Cash Flow and Financing - Cash provided by operating activities was $64 million for the six months ended March 31, 2025, a decrease from $122 million in the same period of 2024 [167]. - Working capital decreased by $25 million to $383 million as of March 31, 2025, primarily due to a decrease in cash and cash equivalents [171]. - The ABL Credit Facility provides a revolving line of credit up to $1,250 million, with $843 million available as of March 31, 2025 [163]. - Adient's Term Loan B Agreement had an outstanding balance of $629 million as of March 31, 2025, with a reduced applicable margin of 2.25% [164]. - During the first six months of fiscal 2025, Adient repurchased 1,227,329 ordinary shares at an average price of $20.37, totaling $25 million [175]. - Cash used by investing activities was $78 million for the six months ended March 31, 2025, down from $113 million in the same period of 2024 [168]. Market Conditions and Outlook - The company faces uncertainties in the automotive industry, including weakening consumer demand and tariff impacts, which may affect future production volumes [110]. - The company continues to face uncertainties in the automotive industry, including weakening consumer demand and pricing pressures due to overcapacity in the EMEA region [141]. - Adient's results for Q2 fiscal 2025 were in line with internal expectations, but uncertainties remain regarding future vehicle production [183]. - The company expects enhanced profitability and cash flows driven by efficiency actions and strategic portfolio reviews [183]. - Adient continues to monitor economic conditions and will test for impairment annually or upon identifying triggering events [182].

Group 1 - Adient reported $3.61 billion in revenue for the quarter ended March 2025, a year-over-year decline of 3.7% [1] - The EPS for the same period was $0.69, compared to $0.54 a year ago, indicating a significant increase [1] - The reported revenue exceeded the Zacks Consensus Estimate of $3.47 billion, resulting in a surprise of +4.07% [1] Group 2 - Adient's EPS surprise was +91.67%, with the consensus EPS estimate being $0.36 [1] - The company's shares returned +22.2% over the past month, outperforming the Zacks S&P 500 composite's +10.6% change [3] - Adient currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Group 3 - Net Sales in the Americas reached $1.70 billion, exceeding the average estimate of $1.59 billion, representing a +2.4% change year-over-year [4] - Net Sales in Asia were reported at $707 million, below the average estimate of $735.50 million, reflecting a -4.7% change year-over-year [4] - Net Sales in EMEA amounted to $1.23 billion, surpassing the average estimate of $1.16 billion, but showing a -10.2% change year-over-year [4]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 was $233 million, up 3% year-on-year, with EBITDA margins expanding by 40 basis points to 6.5% [30][31] - Consolidated sales decreased to approximately $3.6 billion, a decline of $139 million compared to Q2 fiscal year 2024, primarily due to lower customer volumes and foreign exchange impacts [32][33] - Free cash flow for Q2 was an outflow of $90 million, consistent with internal expectations reflecting normal seasonality [39] Business Line Data and Key Metrics Changes - In the Americas, sales increased due to favorable comparisons with the previous year, driven by key customer programs reaching full run rates [33][34] - EMEA experienced lower production volumes but began to see improvements from restructuring efforts, with a recorded non-cash goodwill impairment of $333 million due to market value declines [22][30] - Asia's performance was flat year-on-year, with expectations for growth driven by new business with local OEMs [23][34] Market Data and Key Metrics Changes - The Americas outperformed industry volumes, while EMEA faced headwinds from weaker market demand [33][34] - In Asia, sales in China underperformed due to lower volumes from traditional luxury OEM customers, but new customer launches outside China are expected to drive growth [33][34] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts through resourcefulness and leveraging its global footprint to create value for customers [13][17] - Adient aims to capitalize on growth opportunities by focusing on more profitable business and investing in innovation and efficiency measures [10][17] - The company is committed to maintaining operational excellence and solid execution to navigate macroeconomic volatility [9][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage tariff exposure and emphasized the importance of USMCA compliance [15][17] - The outlook for the second half of fiscal year 2025 remains positive, with expectations for continued strong business performance despite potential volume headwinds from tariffs [45][46] - Management highlighted the resilience of the operating model and the ability to mitigate external pressures [30][31] Other Important Information - Adient received multiple awards for supplier excellence, including recognition from GM and Toyota for quality and performance [11][12] - The company has a strong cash balance of $754 million and total liquidity of $1.6 billion, with no near-term debt maturities [41][42] Q&A Session Summary Question: Can you clarify the progress on tariffs and the roadmap for recovery? - Management indicated that the roadmap includes ongoing price negotiations and cost offsets, with 75% of the gross position already resolved [57][58] Question: How is the EMEA region performing relative to expectations? - Management noted that while EMEA showed positive business performance, it is still subject to variability and should not be seen as a trend [60][62] Question: What is the outlook for margins and cost efficiency actions? - Management expects significant opportunities for margin improvement, particularly in the Americas, while cautioning that EMEA may not see inflection until 2026 [71][74] Question: How are FX assumptions impacting guidance? - Management maintained previous FX assumptions due to volatility, indicating potential translational upside if rates hold [77][78] Question: What is the current mindset on capital allocation? - Management reiterated a measured approach to capital allocation, focusing on investments in the business and potential share repurchases based on cash generation and market clarity [80][82]

Adient (ADNT) Q2 2025 Earnings Call May 07, 2025 08:30 AM ET Company Participants Michael Heifler - VP - IR & StrategyJerome Dorlack - President & CEOMark Oswald - Executive VP & CFOJoseph Spak - Managing Director Conference Call Participants Emmanuel Rosner - Managing Director - Senior Autos & Auto Technology AnalystJames Picariello - Director & Sr. Automotive AnalystColin Langan - Automotive & Mobility AnalystDan Levy - Senior Equity Research AnalystEdison Yu - Analyst Operator Welcome and thank you for s ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 was $233 million, up 3% year-on-year, with EBITDA margins expanding by 40 basis points to 6.5% [29][30] - Consolidated sales decreased to approximately $3.6 billion, a decline of $139 million compared to Q2 FY2024, primarily due to lower customer volumes and foreign exchange impacts [31][32] - Free cash flow for Q2 was an outflow of $90 million, consistent with internal expectations reflecting normal seasonality [39] Business Line Data and Key Metrics Changes - In the Americas, sales increased due to favorable comparisons with the previous year, driven by key customer programs reaching full run rates [31][32] - EMEA experienced lower production volumes but began to see improvements from restructuring benefits, with a recorded non-cash goodwill impairment of $333 million due to market value declines [20][29] - Asia's performance was flat year-on-year, with expectations of temporary pressure on China revenue, but new business with local OEMs is anticipated to drive growth [21][32] Market Data and Key Metrics Changes - The Americas outperformed industry volumes, while EMEA faced headwinds from weaker market demand [31][32] - In Asia, sales in China underperformed due to lower volumes from traditional luxury OEM customers, but the company continues to outperform the industry outside of China [32] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts through resourcefulness and leveraging its global footprint to create value for customers [12][16] - Adient aims to drive operational excellence and invest in innovation, automation, and efficiency measures to enhance profitability [8][10] - The company is committed to maintaining a strong balance sheet and liquidity while navigating macroeconomic challenges [41][44] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to manage tariff exposures and emphasized the importance of customer relationships and operational flexibility [12][16] - The outlook for the second half of FY2025 remains positive, with expectations of continued strong business performance despite potential volume headwinds from tariffs [43][45] - Management reiterated guidance for FY2025 revenue and adjusted EBITDA, assuming no significant changes in tariff policies [44][45] Other Important Information - The company received multiple awards for supplier excellence, including recognition from GM and Toyota for quality and performance [10] - Adient's strong cash position includes $754 million in cash and $1.6 billion in total liquidity as of March 31, 2025 [41][42] Q&A Session Summary Question: Progress on tariff resolution and roadmap - Management indicated that the 75% resolved portion includes agreements for price recoveries, while the roadmap involves ongoing negotiations and cost offsets [57][58] Question: EMEA performance and expectations - Management noted that while EMEA showed positive performance, it is still subject to variability and should not be seen as a trend [60][62] Question: Direct tariff exposure and compliance - Management clarified that 95% of parts produced in Mexico and Canada are USMCA compliant, thus not subject to tariffs, and discussed the implications of Annex One [66][67] Question: Margin outlook and efficiency actions - Management expressed confidence in achieving higher margins through ongoing efficiency improvements and restructuring efforts [71][72] Question: Capital allocation strategy - Management reiterated a measured approach to capital allocation, focusing on investments in the business and potential share repurchases based on cash generation and market clarity [81][84]