Aptiv(US:APTV)2024-08-01 20:06Financial Performance - Total net sales for the three months ended June 30, 2024, were $5.1 billion, a decrease of 3% compared to the same period in 2023[170]. - Total net sales for the six months ended June 30, 2024, were $10.0 billion, a decrease of 1% compared to the same period in 2023[170]. - Net sales for the three months ended June 30, 2024, decreased by 3% to $5,051 million compared to $5,200 million in the same period of 2023, primarily due to a 3% decline in volumes, particularly in Europe and North America[184]. - Total revenue for the six months ended June 30, 2024, was $9,952 million, a decrease from $10,018 million in the same period of 2023, reflecting a variance of $(66) million[205]. - Operating income for the three months ended June 30, 2024, increased to $441 million, up from $410 million in the same period of 2023, representing a favorable variance of $31 million[181]. - Net income attributable to Aptiv for the three months ended June 30, 2024, was $938 million, significantly higher than $242 million in the same period of 2023, marking an increase of $696 million[181]. - Adjusted Operating Income for the three months ended June 30, 2024, was $436 million, up from $392 million in the same period of 2023, an increase of $44 million[207]. - Adjusted Operating Income for the six months ended June 30, 2024, was impacted by $98 million in favorable pricing, net of contractual price reductions[209]. Production and Operations - Vehicle production for the six months ended June 30, 2024, was flat, down 1% on an Aptiv weighted market basis[172]. - Global automotive vehicle production increased by 9% from 2022 to 2023, but was flat for the first half of 2024[172]. - The ongoing semiconductor supply shortage has impacted production and the ability to meet vehicle production demands[174]. - Approximately 97% of the company's hourly workforce is located in best cost countries, providing flexibility to remain profitable throughout the production cycle[177]. - The number of vehicle recalls globally has increased, which may impact the company's operations and financial results[177]. Costs and Expenses - Selling, general and administrative expenses for the three months ended June 30, 2024, increased to $405 million (8.0% of net sales) from $353 million (6.8% of net sales) in the prior year, reflecting an unfavorable variance of $52 million[190]. - Cost of sales for the three months ended June 30, 2024, decreased by $253 million to $4,083 million compared to $4,336 million in the same period of 2023, primarily due to improved operational performance[186]. - Interest expense decreased to $64 million for the three months ended June 30, 2024, down from $72 million in 2023, reflecting the repayment of the Tranche A Term Loan in October 2023[194]. - The automotive industry is experiencing significant inflationary pressures, particularly in raw materials like copper and petroleum-based resin products[178]. - The global semiconductor supply shortage has led to increased pricing pressures, with expectations for continued volatility in semiconductor supply costs[180]. Strategic Initiatives - The acquisition of Wind River in December 2022 aims to enhance capabilities in software-defined mobility and intelligent edge software solutions[174]. - OEMs are increasingly adopting global vehicle platforms, which benefits suppliers with global scale and strong design capabilities[176]. - The Company expects to incur additional restructuring expenses in 2024, primarily related to manufacturing footprint rotation and alignment with automotive production levels[193]. - The Company plans to implement further restructuring activities to optimize its manufacturing footprint and improve efficiency based on market conditions[194]. Investments and Financing - The company has gross debt of approximately $7.0 billion and available liquidity of approximately $4.6 billion as of June 30, 2024[177]. - Cash and cash equivalents as of June 30, 2024, totaled $1.4 billion, with total available liquidity amounting to $4.638 billion[211]. - The company repurchased 5,372,682 shares for $434 million during the three months ended June 30, 2024, at an average price of $80.69 per share[213]. - An accelerated share repurchase program was initiated on August 1, 2024, to repurchase $3.0 billion of ordinary shares[215]. - The company entered into a new $2.5 billion senior unsecured bridge credit facility on August 1, 2024, to partially finance share repurchases[216]. - Aptiv maintains a $2 billion revolving credit facility, maturing on June 24, 2026, with no amounts outstanding as of June 30, 2024[221]. Tax and Equity - The Company's effective tax rate for the three months ended June 30, 2024 included net discrete tax benefits of approximately $27 million, primarily related to a business reorganization[198]. - Equity loss, net of tax, decreased to $34 million for the three months ended June 30, 2024, compared to $73 million in 2023, due to a reduction in the Company's equity interest in Motional[200]. - The total income tax benefit recorded due to intercompany transfers of intellectual property was approximately $2,080 million during the second half of 2023[198]. Research and Development - The company invested approximately $1.8 billion in research and development in 2023, including $492 million from co-investments by customers and government agencies[176]. - The company holds approximately 10,000 patents and protective rights, reflecting its strong focus on innovation and technology development[176].