Accessibility StatementSkip Navigation About Adient: Adient (NYSE: ADNT) is a global leader in automotive seating. With approximately 70,000 employees in 29 countries, Adient operates more than 200 manufacturing/assembly plants worldwide. We produce and deliver automotive seating for all major OEMs. From complete seating systems to individual components, our expertise spans every step of the automotive seat-making process. Our integrated, in-house skills allow us to take our products from research and desig ...

Group 1 - Wells Fargo upgraded Adient from Equal Weight to Overweight, raising its price target to $31 from $24, with shares rising nearly 2% in pre-market trading [1] - Adient is expected to benefit from improved global light vehicle production in 2026, with adjusted EBITDA projected to be about 7% above consensus [1] - The stock is currently trading at near-trough valuation multiples, indicating potential for growth [1] Group 2 - The company's turnaround has faced delays due to weak global production, unfavorable customer mix, extended unprofitable programs, and persistent cost inflation [2] - Margin recovery is anticipated to accelerate starting in 2026 as North American volumes improve, foreign exchange trends stabilize, and unprofitable programs are phased out [2]

Monetary Policy and Economic Outlook - The U.S. Federal Reserve cut interest rates by 25 basis points for the first time this year, indicating a shift towards monetary easing and expecting two more cuts by year-end [1][9] - Despite inflation remaining above the 2% target, the increase in the unemployment rate has pressured policymakers to focus on supporting economic growth [2] - The Fed has raised its projections for economic growth this year, with expectations for higher growth next year [2] Investment Opportunities - Investors are encouraged to design their portfolios to capitalize on the improving economic scenario, with broker-adored stocks such as CVR Energy (CVI), Asbury Automotive Group (ABG), American Axle & Manufacturing Holdings (AXL), General Motors Company (GM), and Adient plc (ADNT) highlighted for potential returns [3][9] - A screening process has been developed to shortlist stocks based on improving analyst recommendations, upward estimate revisions, and low price/sales ratios [4][5] Stock Screening Criteria - The screening parameters include net upgrades in analyst ratings over the last four weeks, earnings estimate revisions, and a focus on companies with lower price/sales ratios [5][6] - Additional criteria include a current price greater than $5, an average daily volume exceeding 100,000 shares over the last 20 trading days, and a market value in the top 3000 stocks by market capitalization [6] Company Profiles - CVR Energy is involved in renewable energy and petroleum refining, committed to developing renewable biofuels [7] - Asbury Automotive Group has a diversified product mix and is leveraging its e-commerce platform, Clicklane, for growth [8][10] - American Axle is advancing in the electric drive space, enhancing its market position through collaborations [11][12] - General Motors remains the top-selling U.S. automaker, driven by strong demand for its vehicles and a robust electrification strategy [13][14] - Adient is a leading automotive seating supplier with a diverse customer base and strong market presence [14][15]

Core Insights - Adient Group, previously part of Johnson Controls, has become a top global automotive parts manufacturer since its independent listing in 2016, with projected global revenue of $14.7 billion in 2024 [2] - The new Adient automotive seat production facility in Wuhan is expected to generate annual revenue of approximately 1 billion yuan upon reaching full production by June 2026 [2] - The facility will leverage Adient's technological advantages and customer resources to meet the increasing demand for high-end seats in the electric vehicle market [2] Company Overview - Adient operates in 29 countries with over 200 manufacturing bases and 12 technology centers, maintaining a strong market share in the automotive parts industry [2] - In China, Adient has established 37 production bases, 3 global technology centers, and 8 joint ventures, serving over 40 well-known automotive companies [2] Strategic Location - The choice of Wuhan for the new production base is strategic, as it is one of China's six major automotive industry cluster cities, particularly in the electric vehicle sector [2] - The facility's proximity to customer factories will enable "minute-level" supply chain responses, significantly reducing logistics costs and enhancing service efficiency [2] Industry Impact - The establishment of the production base is expected to enhance Adient's presence in China and promote collaborative development among upstream and downstream supply chain enterprises [2] - This move will attract more quality supporting enterprises to the Wuhan Economic Development Zone, further strengthening its competitive advantage in the electric vehicle sector [2]

Industry Overview - The Zacks Automotive - Original Equipment industry is expected to benefit from acquisitions, collaborations, a diverse customer base, and the global expansion of original equipment manufacturers [1][2] - The industry focuses on designing and producing passive safety systems, driveline, and metal forming technologies for various vehicle types, including electric and hybrid vehicles [2] Factors Influencing the Industry Outlook - Automation technology is enhancing efficiency, productivity, quality, and safety while reducing labor costs for manufacturers, providing a competitive edge [3] - A new tax incentive allows car buyers to deduct up to $10,000 annually in auto loan interest from their federal taxable income, which is anticipated to increase demand for new vehicles [4] Demand and Production Trends - A decline in vehicle production due to weak demand, particularly for unsold electric vehicles, is expected to negatively impact the demand for auto equipment [5] - The U.S. government has implemented a 25% import tax on essential auto components, raising costs for domestic equipment manufacturers [6] Industry Performance and Valuation - The Zacks Automotive - Original Equipment Industry ranks 91, placing it in the top 37% of over 250 Zacks industries, indicating positive near-term prospects [7][8] - The industry has underperformed the S&P 500, declining 3% over the past year compared to the S&P 500's growth of 16.6% [10] - The industry is currently trading at an EV/EBITDA ratio of 18.57X, higher than the S&P 500's 17.77X and lower than the sector's 22.63X [13] Company Highlights - **Gentex Corporation (GNTX)**: Supplies automatic-dimming mirrors and electronics, with growth potential in tech products and a recent acquisition of VOXX International expanding its portfolio [16][17] - **Adient plc (ADNT)**: A leading automotive seating supplier focusing on automation and modularity, with a diverse customer base and international presence [22][23] - **American Axle & Manufacturing Holdings, Inc. (AXL)**: A supplier of driveline systems advancing in electrification, with a strong market position bolstered by recent acquisitions [26][27]

Market Overview - The U.S. stock market is expected to face ongoing volatility due to uncertainties surrounding trade policies, economic challenges, and changing investor sentiment [1] - A 90-day extension on higher tariffs against China provides temporary relief, but the lack of clarity on tariffs suggests that volatility will persist [1] Investment Strategy - Investors are encouraged to consider broker recommendations as a practical approach to identify promising stocks amid market uncertainty [2] - Broker-backed stocks such as American Axle & Manufacturing (AXL), Brookdale Senior Living (BKD), Adient (ADNT), Asbury Automotive (ABG), and AutoNation (AN) are highlighted as attractive options for potential returns [2][8] Stock Screening Methodology - A screening process has been developed to identify stocks based on improving broker recommendations and upward revisions in earnings estimates over the past four weeks [3] - The screening criteria include net upgrades in ratings, percentage change in earnings estimates, and price-to-sales ratio, focusing on companies with strong top-line performance [4][5] Featured Stocks - **American Axle & Manufacturing (AXL)**: The company is making significant progress in the electric drive sector and has secured multiple contracts, indicating strong growth potential. AXL has exceeded earnings estimates by an average of 584.1% over the past four quarters [6][7] - **Brookdale Senior Living (BKD)**: An increase in occupancy rates is expected to drive higher resident fee revenues, contributing to growth in adjusted EBITDA. BKD's earnings estimate for 2025 has been revised upward by 7.8% from 2024 [9] - **Adient (ADNT)**: The company has a diverse customer base and is focused on product launches to secure new business. ADNT has beaten earnings estimates in three of the past four quarters, with an average beat of 30.3% [10][11] - **Asbury Automotive (ABG)**: The company's diversified product mix and e-commerce platform are driving growth. ABG has beaten earnings estimates in two of the past four quarters, with an average beat of 5.9% [12][13] - **AutoNation (AN)**: As one of the largest automotive retailers, AutoNation is expanding its store network and embracing digital transformation. AN has surpassed earnings estimates in three of the past four quarters, with an average beat of 7.5% [14][15]

Core Insights - Adient (ADNT) reported adjusted earnings per share (EPS) of 45 cents for Q3 FY2025, an increase from 32 cents year-over-year but below the Zacks Consensus Estimate of 47 cents [1][9] - The company generated net sales of $3.74 billion, reflecting a 0.7% year-over-year increase and exceeding the Zacks Consensus Estimate of $3.56 billion [1][9] - Adient raised its revenue guidance for FY2025 to $14.4 billion from a previous estimate of $13.9 billion, with adjusted EBITDA also increased to $875 million from $850 million [7][9] Segment Performance - The Americas segment reported revenues of $1.76 billion, up 1.3% year-over-year, surpassing the Zacks Consensus Estimate of $1.59 billion, with adjusted EBITDA of $112 million, an increase from $99 million in the prior year [3] - The EMEA segment generated revenues of $1.27 billion, down 1.6% year-over-year but above the Zacks Consensus Estimate of $1.22 billion, with adjusted EBITDA declining to $21 million from $25 million [4] - The Asia segment's revenues were $721 million, slightly up from $712 million year-over-year but below the Zacks Consensus Estimate of $739 million, with adjusted EBITDA increasing to $113 million from $101 million [5] Financial Position - As of June 30, 2025, Adient had cash and cash equivalents of $860 million, down from $945 million as of September 30, 2024, and long-term debt stood at $2.39 billion [6] - Capital expenditures for the quarter totaled $57 million, compared to $70 million in the prior-year quarter [6] Guidance Updates - Adient's updated guidance for FY2025 includes projected revenues of $14.4 billion, adjusted EBITDA of $875 million, equity income of $75 million, and free cash flow anticipated in the range of $150-$170 million, with capital expenditures estimated at $260 million [7]

Group 1 - Adient has appointed Linda Conrad as vice president of Financial Planning & Analysis (FP&A) and Investor Relations, effective August 11, 2025 [1][2] - Linda Conrad has extensive financial expertise, having previously served as vice president of Finance - Corporate at Harman International and held leadership roles at tier one automotive and manufacturing organizations [2] - Linda holds an MBA in Finance from Case Western Reserve University and a bachelor's degree in Business - Finance from the University of Denver [2] Group 2 - Adient is a global leader in automotive seating, employing approximately 70,000 people across 29 countries and operating over 200 manufacturing and assembly plants worldwide [4] - The company produces and delivers automotive seating for all major OEMs, covering the entire process from research and design to engineering and manufacturing [4]

Core Insights - Adient reported revenue of $3.74 billion for the quarter ended June 2025, reflecting a year-over-year increase of 0.7% and a surprise of +5.08% over the Zacks Consensus Estimate of $3.56 billion [1] - The company's EPS for the quarter was $0.45, compared to $0.32 in the same quarter last year, although it fell short of the consensus estimate of $0.47, resulting in an EPS surprise of -4.26% [1] Company Performance Metrics - Adient's stock has returned -0.2% over the past month, while the Zacks S&P 500 composite has increased by +0.5%, indicating underperformance relative to the broader market [3] - The company holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the market in the near term [3] Light Vehicle Production Insights - Global light vehicle production reached 22.6 million, exceeding the two-analyst average estimate of 21.97 million [4] - North American light vehicle production was 4 million, surpassing the average estimate of 3.81 million [4] - Light vehicle production in Asia (excluding China) was 5.9 million, above the average estimate of 5.6 million [4] - EMEA light vehicle production was reported at 4.4 million, slightly above the average estimate of 4.35 million [4] - In China, light vehicle production was 7.6 million, exceeding the average estimate of 7.47 million [4] - South American light vehicle production was 0.7 million, slightly below the average estimate of 0.75 million [4] Net Sales Performance - Net sales in the Americas were $1.76 billion, exceeding the average estimate of $1.59 billion, with a year-over-year change of +1.3% [4] - Net sales from eliminations were reported at -$8 million, significantly better than the average estimate of -$25.92 million, representing a year-over-year change of -61.9% [4] - Net sales in Asia were $721 million, slightly below the average estimate of $739.34 million, with a year-over-year change of +1.3% [4] - EMEA net sales were $1.27 billion, above the average estimate of $1.22 billion, but showed a year-over-year decline of -1.6% [4]

PART I - FINANCIAL INFORMATION [Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Unaudited%20Financial%20Statements) The company's Q3 net income improved to $36 million, but the nine-month net loss widened to $299 million due to a significant goodwill impairment charge Consolidated Statements of Income (Loss) Highlights | Indicator (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $3,741 | $3,716 | $10,847 | $11,126 | | **Gross profit** | $237 | $207 | $714 | $683 | | **Earnings before interest and income taxes** | $118 | $94 | $(5) | $213 | | **Net income (loss) attributable to Adient** | $36 | $(11) | $(299) | $(61) | | **Diluted EPS** | $0.43 | $(0.12) | $(3.56) | $(0.67) | Consolidated Statements of Financial Position Highlights | Indicator (in millions) | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Total current assets** | $4,022 | $4,086 | | **Total assets** | $8,836 | $9,351 | | **Total current liabilities** | $3,598 | $3,678 | | **Long-term debt** | $2,385 | $2,396 | | **Total liabilities** | $6,676 | $6,817 | | **Total shareholders' equity** | $2,074 | $2,443 | Consolidated Statements of Cash Flows Highlights (Nine Months Ended June 30) | Indicator (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | **Cash provided by operating activities** | $236 | $280 | | **Cash used by investing activities** | $(127) | $(183) | | **Cash used by financing activities** | $(212) | $(313) | | **Decrease in cash and cash equivalents** | $(85) | $(220) | | **Cash and cash equivalents at end of period** | $860 | $890 | - A triggering event in Q2 fiscal 2025 led to a **$333 million non-cash goodwill impairment charge** for the EMEA reporting unit, leaving no remaining goodwill in that segment[35](index=35&type=chunk)[36](index=36&type=chunk) - In February 2025, the company issued **$795 million of 7.50% senior unsecured notes** due 2033 to redeem its 4.875% notes due 2026[50](index=50&type=chunk) - Adient repurchased **4,014,410 ordinary shares for $75 million** during the first nine months of fiscal 2025, with **$185 million remaining** under the repurchase authorization[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Macroeconomic pressures and slower EV adoption impacted performance, leading to a goodwill impairment, while restructuring efforts continue amid sufficient liquidity [Factors Affecting Adient's Operating Environment](index=33&type=section&id=Factors%20Affecting%20Adient's%20Operating%20Environment) The company's operating environment is challenged by weakening consumer demand, tariffs, and market pressures, which prompted a significant goodwill impairment charge - The company faces uncertainties from weakening consumer demand, tariffs, market share loss for foreign OEMs in Asia, and overcapacity in EMEA due to slower EV adoption rates[117](index=117&type=chunk) - As a result of these macroeconomic factors, Adient recorded a **$333 million non-cash goodwill impairment** in its EMEA segment as of March 31, 2025[118](index=118&type=chunk) [Consolidated Results of Operations](index=34&type=section&id=Consolidated%20Results%20of%20Operations) Q3 net sales rose 1% to $3.74 billion, while the nine-month net loss widened to $299 million, primarily due to a goodwill impairment charge Net Sales Performance | Period | Net Sales (in millions) | Change YoY | | :--- | :--- | :--- | | **Q3 2025** | $3,741 | +1% | | **Nine Months 2025** | $10,847 | -3% | - Q3 2025 net sales increase was driven by favorable foreign currencies (**$84M**) and pricing (**$10M**), partially offset by lower volumes (**$54M**)[125](index=125&type=chunk) - Gross profit margin improved from **5.6% to 6.3%** in Q3 YoY and from **6.1% to 6.6%** for the nine-month period YoY, driven by favorable pricing and operating performance[127](index=127&type=chunk) - The nine-month net loss of **$299 million** was primarily driven by a **$333 million goodwill impairment charge** in EMEA and a **$10 million impairment** on an investment[132](index=132&type=chunk)[143](index=143&type=chunk) [Segment Analysis](index=39&type=section&id=Segment%20Analysis) Segment performance varied, with Americas and Asia showing Adjusted EBITDA growth, while the EMEA segment experienced a decline Adjusted EBITDA by Segment (Q3 2025 vs Q3 2024) | Segment | Q3 2025 Adj. EBITDA (in millions) | Q3 2024 Adj. EBITDA (in millions) | Change YoY | | :--- | :--- | :--- | :--- | | **Americas** | $112 | $99 | +13% | | **EMEA** | $21 | $25 | -16% | | **Asia** | $113 | $101 | +12% | - **Americas:** Adjusted EBITDA increased by **$13 million** in Q3 due to favorable pricing adjustments (**$22M**) and improved operating performance (**$6M**)[160](index=160&type=chunk) - **EMEA:** Adjusted EBITDA decreased by **$4 million** in Q3 due to higher administrative expenses (**$11M**) and lower production volumes (**$5M**), partially offset by favorable pricing (**$14M**)[164](index=164&type=chunk) - **Asia:** Adjusted EBITDA increased by **$12 million** in Q3 due to favorable operating performance (**$10M**) and positive currency effects (**$6M**)[168](index=168&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through operating cash flow and its credit facility while continuing share repurchases and restructuring efforts Cash Flow Summary (Nine Months Ended June 30) | Cash Flow (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | **Operating Activities** | $236 | $280 | | **Investing Activities** | $(127) | $(183) | | **Financing Activities** | $(212) | $(313) | - As of June 30, 2025, Adient had **$872 million of availability** under its ABL Credit Facility, with no amounts drawn down[172](index=172&type=chunk) - The company initiated the "2025 Plan" for restructuring, with expected annual operating cost savings of approximately **$53 million** upon completion[181](index=181&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There were no material changes to the company's market risk exposures since the last annual report - Adient reported **no material adverse changes** in its market risk exposures since its last annual report[197](index=197&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period[198](index=198&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[199](index=199&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal proceedings are not expected to have a material adverse effect on the company's financial condition - The company is involved in various legal proceedings but does not expect them to have a **material adverse effect** on its financial condition or results[201](index=201&type=chunk) [Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) Updated risks include impacts from U.S. trade policy, auto industry conditions evidenced by a goodwill impairment, and potential limitations on tax attribute usage - An updated risk factor highlights the adverse effect of U.S. trade policy and tariffs, noting that Adient had incurred **$13 million of incremental tariff expense**, net of recoveries[204](index=204&type=chunk) - The risk related to the global automotive industry's condition was updated to reflect the **$333 million non-cash goodwill impairment** in the EMEA reporting unit[207](index=207&type=chunk) - A new risk factor was added regarding the potential limitation on using net operating loss carryforwards if the company undergoes an **"ownership change"** under U.S. tax law[208](index=208&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased approximately $50 million of its shares in June 2025, with $185 million remaining under its repurchase authorization Share Repurchase Activity (Q3 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Total Cost (approx. in millions) | | :--- | :--- | :--- | :--- | | **April 2025** | — | $— | $0 | | **May 2025** | — | $— | $0 | | **June 2025** | 2,787,081 | $17.94 | $50 | | **Total** | **2,787,081** | **$17.94** | **$50** | - As of June 30, 2025, the remaining authorized amount for share repurchases under the program was **$185 million**[211](index=211&type=chunk) [Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities during the period - None[212](index=212&type=chunk) [Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Adient's business - Not applicable[213](index=213&type=chunk) [Other Information](index=50&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading arrangements during the quarter - No directors or executive officers adopted or terminated any Rule 10b5-1 trading arrangements during the quarter[214](index=214&type=chunk) [Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section indexes the exhibits filed with the report, including required CEO/CFO certifications and interactive data files - The report includes CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, as well as Inline XBRL documents[217](index=217&type=chunk)