Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List due to downward revisions in earnings estimates over the last 60 days [1] Company Summaries - **Adient plc (ADNT)**: An automotive seating supplier with a current year earnings estimate revised downward by 10.7% [1] - **ArcBest Corporation (ARCB)**: A freight transportation and integrated logistics services company with a current year earnings estimate revised downward by 15% [1] - **The GEO Group, Inc. (GEO)**: A company that owns, leases, and manages secure facilities, with a current year earnings estimate revised downward by 3.8% [1]

Group 1 - ARMOUR Residential REIT (ARR) primarily invests in residential mortgage-backed securities issued or guaranteed by a United States Government-chartered entity [1] - The Zacks Consensus Estimate for ARMOUR's current year earnings has been revised downward by almost 14.8% over the last 60 days [1] - Adient (ADNT) is one of the world's largest automotive seating suppliers [1] - The Zacks Consensus Estimate for Adient's current year earnings has been revised downward by 11.9% over the last 60 days [1] - Americas Gold and Silver (USAS) is a metal producer engaged in the exploration, development, operation, and acquisition of precious metal properties [1] - The Zacks Consensus Estimate for Americas Gold and Silver's current year earnings has been revised downward by 57.1% over the last 60 days [1]

Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List due to significant downward revisions in earnings estimates over the last 60 days [1] Company Summaries - **Adient plc (ADNT)**: An automotive seating supplier with a current year earnings estimate revised downward by 14.6% [1] - **ArcBest Corporation (ARCB)**: A freight transportation and integrated logistics services company with a current year earnings estimate revised downward by 15% [1] - **Civista Bancshares, Inc. (CIVB)**: The financial holding company for Civista Bank, with a current year earnings estimate revised downward by 13.2% [1]

Group 1 - Adient plc (ADNT), an automotive seating supplier, has seen its current year earnings estimate revised downward by 15.9% over the last 60 days [1] - California BanCorp (CALB), the bank holding company for California Bank of Commerce, has experienced a 3.6% downward revision in its current year earnings estimate over the last 60 days [1] - CareTrust REIT, Inc. (CTRE), a publicly-traded real estate investment trust, has had its current year earnings estimate revised downward by 5.2% over the last 60 days [1]

Group 1 - Boot Barn Holdings, Inc. (BOOT) is a lifestyle retail chain with a current year earnings estimate revised downward by 8.2% over the last 60 days [1] - Capri Holdings Limited (CPRI) is a retailer of apparels, experiencing a 14.7% downward revision in its current year earnings estimate over the last 60 days [1] - Adient plc (ADNT) is an automotive seating supplier, with its current year earnings estimate revised downward by 16.8% over the last 60 days [1]

Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List due to significant downward revisions in their earnings estimates over the last 60 days [1] Company Summaries - **3D Systems Corporation (DDD)**: This company specializes in 3D printing and digital manufacturing solutions. The Zacks Consensus Estimate for its current year earnings has been revised downward by 11.1% over the last 60 days [1] - **Adient plc (ADNT)**: An automotive seating supplier, Adient has seen its Zacks Consensus Estimate for current year earnings revised downward by 16.8% over the last 60 days [1] - **Allegiant Travel Company (ALGT)**: A leisure travel company, Allegiant's Zacks Consensus Estimate for current year earnings has been revised downward by 37.6% over the last 60 days [1]

Core Viewpoint - Adient reported adjusted earnings per share (EPS) of 54 cents for Q2 fiscal 2024, an increase from 32 cents in the previous year, surpassing the Zacks Consensus Estimate of 39 cents [1] Financial Performance - The company generated net sales of $3.75 billion, a decrease of 4.1% year over year, missing the Zacks Consensus Estimate of $3.83 billion [1] - Cash and cash equivalents stood at $905 million as of March 31, 2024, down from $1.11 billion as of September 30, 2023 [4] - Long-term debt was reported at $2.4 billion as of March 31, 2024 [4] - Capital expenditures totaled $69 million, compared to $56 million in the prior-year quarter [4] - During the quarter, Adient repurchased nearly 1.5 million shares for $50 million [4] Segmental Performance - The Americas segment recorded revenues of $1.66 billion, down 5.7% year over year, missing the Zacks Consensus Estimate of $1.80 billion; adjusted EBITDA increased to $80 million from $72 million [2] - The EMEA segment generated revenues of $1.37 billion, a decline of 2.2% year over year, missing the Zacks Consensus Estimate of $1.38 billion; EBITDA rose to $57 million from $53 million [3] - The Asia segment reported revenues of $742 million, down 4.1% year over year, missing the Zacks Consensus Estimate of $774 million; adjusted EBITDA fell 0.8% year over year to $112 million [3] Revised Guidance for 2024 - Adient revised its fiscal 2024 revenue guidance to a range of $14.8-$14.9 billion, down from $15.40-$15.50 billion; adjusted EBITDA is now estimated at $900-$920 million, down from $985 million [5] - Equity income is projected to be $80 million, an increase from the previous guidance of $70 million [5] - Free cash flow is anticipated to be $250 million, down from the previous guidance of $300 million [5] - Capital expenditures and cash tax are estimated between $310 million and $105 million, respectively; interest expenses are expected to be $185 million [5]

Group 1 - Atlas Energy Solutions Inc. (AESI) provides proppant and logistics services primarily in the Permian Basin of West Texas and New Mexico, with a current year earnings estimate revised down by almost 27% over the last 60 days [1] - Aegon (AEG) is an international insurance group offering life and health insurance, pension, savings, and investment products across Europe, North America, and the Caribbean, with a current year earnings estimate revised down by 11.5% over the last 60 days [1] - Adient (ADNT) is one of the largest automotive seating suppliers globally, with a current year earnings estimate revised down by 10.8% over the last 60 days [1]

Core Viewpoint - Adient's international operations are crucial for assessing its financial strength and growth potential, especially in a globally interconnected economy [1][2]. Group 1: International Revenue Performance - In the recent quarter, Adient's total revenue was $3.75 billion, a decline of 4.1% year-over-year [2]. - Asia contributed $742 million, or 19.8% of total revenue, which was a surprise of -4.07% compared to the consensus estimate of $773.51 million [3]. - EMEA generated $1.37 billion, accounting for 36.5% of total revenue, slightly below the expected $1.38 billion, representing a surprise of -0.63% [3]. Group 2: Future Revenue Projections - Analysts project total revenue for the current fiscal quarter to reach $4.06 billion, reflecting a 0.1% increase from the same quarter last year [4]. - For the full year, total revenue is expected to be $15.44 billion, indicating a 0.3% increase year-over-year [4]. - Revenue contributions from Asia and EMEA for the full year are anticipated to be $3.13 billion (20.3%) and $5.27 billion (34.1%), respectively [4]. Group 3: Stock Performance and Market Position - Adient's stock has decreased by 9.6% over the past month, while the Zacks S&P 500 composite fell by only 0.4% [7]. - Over the last three months, Adient's shares declined by 19%, contrasting with a 4.9% increase in the S&P 500 [7]. - The company currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance compared to the broader market in the near term [6].

Financial Performance - Adient recorded net sales of $3,750 million for Q2 fiscal 2024, a decrease of $162 million or 4.1% compared to Q2 fiscal 2023, primarily due to lower production volumes in the Americas and EMEA regions [136]. - Gross profit for Q2 fiscal 2024 was $230 million, or 6.1% of net sales, down from $250 million or 6.4% in Q2 fiscal 2023, attributed to lower production volumes and unfavorable foreign currency impacts [137]. - Net loss attributable to Adient was $70 million in Q2 fiscal 2024, compared to a net loss of $15 million in Q2 fiscal 2023, mainly due to higher restructuring costs and unfavorable foreign currency impacts [139]. - Adient's net sales for the first six months of fiscal 2024 decreased by $201 million, or 3%, compared to the same period in fiscal 2023, due to lower production volumes across all regions [142]. - Net sales for the three months ended March 31, 2024, decreased by 6% to $1,660 million compared to $1,761 million in the same period of 2023 [169]. - Net sales for the six months ended March 31, 2024, decreased by 5% to $3,307 million compared to $3,485 million in the same period of 2023 [169]. - Comprehensive loss attributable to Adient was $168 million for the second quarter of fiscal 2024, a decrease of $196 million compared to comprehensive income of $28 million in the same quarter of fiscal 2023 [159]. Cost and Expenses - Cost of sales decreased by $142 million, or 4%, in Q2 fiscal 2024, while gross profit decreased by $20 million, or 8%, compared to Q2 fiscal 2023 [144]. - Selling, general and administrative expenses decreased by 18% to $115 million in Q2 fiscal 2024, down from $141 million in Q2 fiscal 2023 [140]. - Cost of sales decreased by $196 million, or 3%, and gross profit decreased by $5 million, or 1%, in the first six months of fiscal 2024 compared to the same period in fiscal 2023 [145]. - SG&A expenses decreased by $26 million, or 18%, in the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023 [146]. - Restructuring and impairment costs surged over 100% to $125 million in Q2 fiscal 2024, compared to $17 million in Q2 fiscal 2023 [140]. - Restructuring actions under the "2024 Plan" resulted in charges of $138 million, expected to reduce annual operating costs by approximately $80 million upon completion [188]. Equity and Income - Equity income increased to $18 million in Q2 fiscal 2024 from $4 million in Q2 fiscal 2023, driven by favorable production volumes at partially-owned affiliates [138]. - Equity income was $18 million for the second quarter of fiscal 2024, a significant increase from $4 million in the same quarter of fiscal 2023 [150]. - Income tax provision for the second quarter of fiscal 2024 was $8 million, a decrease of 68% compared to $25 million in the same quarter of fiscal 2023 [155]. Market Conditions - The automotive industry is facing inflationary pressures and volatile commodity pricing, impacting Adient's operating environment [133]. - The decrease in net sales during the second quarter of fiscal 2024 was primarily due to lower production volumes from slower product launches, totaling a negative impact of $103 million [170]. - The unfavorable impact of foreign currencies on net sales was $2 million for the three months ended March 31, 2024 [170]. Financing and Liquidity - Adient believes its current financial resources will be sufficient to fund its liquidity requirements for at least the next twelve months [179]. - Adient maintains an asset-based revolving credit facility with a total line of credit up to $1,250 million, including $950 million for North America and $300 million for Europe, with $974 million available as of March 31, 2024 [180]. - The Term Loan B Agreement had an outstanding balance of $635 million as of March 31, 2024, with an amended maturity date extended to January 31, 2031, and a reduced applicable margin from 3.25% to 2.75% [181]. - Adient issued $500 million in senior secured notes and $500 million in senior unsecured notes in March 2023, with total net proceeds of $988 million used primarily to redeem $350 million of the Term Loan B Agreement [183]. Operational Efficiency - Operating cash flows decreased to $122 million for the six months ended March 31, 2024, down from $170 million year-over-year, primarily due to a higher net loss [185]. - Working capital decreased by $111 million to $467 million as of March 31, 2024, due to decreases in cash and inventories [187]. - The company experienced an increase in capital expenditures to $124 million for the first six months of fiscal 2024, attributed to timing of program spend on product launches [186]. - Adient's management continues to analyze operations for efficiency improvements and cost reductions in response to changes in the automotive market [189]. - The company continues to monitor market conditions within the automotive industry and may consider further restructuring actions as needed [149].