Core Viewpoint - Adient reported its fourth quarter 2025 financial results, highlighting a mixed performance with a net income of $18 million and an adjusted EBITDA of $226 million, while also indicating challenges ahead due to lower customer production volumes and increased growth investments [6]. Financial Performance - Q4 GAAP net income was $18 million, with diluted EPS of $0.22; adjusted EPS for Q4 was $0.52 [6]. - Adjusted EBITDA for Q4 was $226 million, resulting in an adjusted EBITDA margin of 6.1% [6]. - For the full fiscal year 2025, Adient generated $204 million in free cash flow and returned $125 million to shareholders through share repurchases, representing approximately 7% of shares outstanding at the beginning of the fiscal year [6]. Debt and Cash Position - As of September 30, 2025, Adient's gross debt and net debt were approximately $2.4 billion and $1.4 billion, respectively, with cash and cash equivalents totaling $958 million [6]. Future Outlook - Looking ahead to fiscal year 2026, Adient expects improved business performance to be offset by lower customer production volumes and increased growth investments [6].

Financial Performance - Adient reported Q4 2025 revenue of $3,688M, a 4% increase compared to Q4 2024, with adjusted EBITDA of $226M and an adjusted EBITDA margin of 6.1%[1][8] - For the full year FY25, Adient's revenue was $14,535M, a 1% decrease from FY24, with adjusted net income of $570M and adjusted EPS of $1.93, reflecting a 5% increase year-over-year[1][2] - Net sales for Q4 2025 were $3,688 million, a 3.5% increase from $3,562 million in Q4 2024[22] - Gross profit for Q4 2025 was $247 million, slightly up from $245 million in Q4 2024, resulting in a gross margin of 6.7%[22] - Net income attributable to Adient for Q4 2025 was $18 million, a decrease from $79 million in Q4 2024[22] - For the twelve months ended September 30, 2025, consolidated net sales totaled $14,535 million, a decrease from $14,688 million in 2024, indicating a decline of 1.0%[30] - Adjusted net income attributable to Adient for the three months ended September 30, 2025, was $42 million, compared to $59 million in the same period of 2024, a decrease of 28.8%[35] - The net income (loss) attributable to Adient for the three months ended September 30, 2025, was $18 million, down from $79 million in the same period of 2024[32] Cash Flow and Liquidity - Free cash flow for FY25 totaled $204M, with $125M returned to shareholders through share repurchases, representing approximately 7% of shares outstanding at the beginning of the fiscal year[2][4] - The company maintained cash and cash equivalents of $958M and total liquidity of $1.8B as of September 30, 2025[4] - Cash provided by operating activities for Q4 2025 was $213 million, down from $263 million in Q4 2024[26] - The free cash flow for the twelve months ended September 30, 2025, was $204 million, down from $277 million in 2024[42] - The operating cash flow for the three months ended September 30, 2025, was $263 million, compared to $213 million in 2024[42] Business Development - Adient secured $1.4B in new business in Asia during FY25, with local OEMs accounting for nearly 70% of this new business[3] - Looking ahead to FY26, Adient expects consolidated sales of approximately $14.4B and adjusted EBITDA of around $845M, impacted by lower year-over-year production volumes[15] - Capital expenditures for FY26 are projected to be around $300M, primarily driven by customer launch plans and innovation projects[15] - The company plans to launch innovative products such as Z-Guard in 2027 and sculpted trim in Q2 FY26, focusing on safety and design flexibility[16][17] Debt and Leverage - Adient's gross debt and net debt were approximately $2.4B and $1.4B respectively as of September 30, 2025[8] - The net debt as of September 30, 2025, was $1,439 million, a slight decrease from $1,460 million in 2024[44] - The total debt as of September 30, 2025, was $2,397 million, down from $2,405 million in 2024[44] - The net leverage ratio as of September 30, 2025, was 1.63, compared to 1.66 in 2024[44] Segment Performance - Adient's segment adjusted EBITDA for Asia was $440M in FY25, showing stability compared to FY24, while Americas and EMEA segments reported $402M and $124M respectively[10] - The Americas segment reported net sales of $6,856 million for the twelve months ended September 30, 2025, up from $6,763 million in 2024, reflecting a growth of 1.4%[30] - The EMEA segment's adjusted EBITDA margin for the three months ended September 30, 2025, was 6.2%, compared to 2.5% in the same period of 2024, indicating significant improvement[30] Adjustments and Non-Recurring Items - Restructuring and impairment costs for Q4 2025 were $11 million, down from $16 million in Q4 2024[22] - The adjusted EBIT for the twelve months ended September 30, 2025, was $570 million, compared to $564 million in 2024, showing a slight increase of 1.1%[34] - The adjusted EBITDA for the twelve months ended September 30, 2025, was $881 million, consistent with $880 million in the previous year[34] - The overall impact of adjustments primarily related to purchase accounting amortization on noncontrolling interests was reflected in the financial results[47]

Core Viewpoint - Adient (ADNT) is anticipated to report a year-over-year decline in earnings despite an increase in revenues for the quarter ending September 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Financial Expectations - The upcoming earnings report is expected to reveal quarterly earnings of $0.55 per share, reflecting a year-over-year decrease of 19.1%, while revenues are projected to be $3.63 billion, representing a 2% increase from the previous year [3]. - The consensus EPS estimate has been revised down by 4.76% over the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that Adient has a positive Earnings ESP of +3.04%, suggesting a likelihood of beating the consensus EPS estimate [12]. - The stock currently holds a Zacks Rank of 3, which, when combined with the positive Earnings ESP, indicates a higher probability of an earnings beat [12]. Historical Performance - In the last reported quarter, Adient was expected to post earnings of $0.47 per share but delivered $0.45, resulting in a surprise of -4.26% [13]. - Over the past four quarters, Adient has surpassed consensus EPS estimates three times [14]. Industry Context - In the broader automotive industry, Magna (MGA) is expected to report earnings of $1.24 per share for the same quarter, reflecting a year-over-year decline of 3.1%, with revenues anticipated at $10.01 billion, down 2.6% from the previous year [18]. - Magna's consensus EPS estimate has been revised up by 1.2% in the last 30 days, and it also has a positive Earnings ESP of +1.34%, indicating a likelihood of beating the consensus EPS estimate [19].

Financial Data and Key Metrics Changes - The company reported record-breaking third-quarter sales of over $2.7 billion, a 6% increase year-over-year, driven by strong performance in Asia and South America [9][12] - Adjusted operating income increased by 14% to $271 million, with an adjusted operating margin of 10%, up 70 basis points from the previous year [9][16] - Earnings per share increased by 26% to $2.31, marking the ninth consecutive quarter of growth in adjusted earnings per share [17] - Operating cash flow was robust at $258 million, an increase of 46% compared to the previous year [19] Business Line Data and Key Metrics Changes - Sales growth was particularly strong in China, with a return to outperformance with Chinese OEMs, driven by recent product launches [4][12] - The company achieved a gross margin of 19.3%, an increase of 130 basis points year-over-year, primarily due to direct labor efficiency and headcount reductions [10][16] Market Data and Key Metrics Changes - Global light vehicle production increased by 4.6% in the third quarter, exceeding expectations, with strong growth for domestic OEMs in China [11][23] - Light vehicle production in North America showed resilience, while production in Western Europe and Japan declined by approximately 2% to 3% [11][23] - The company underperformed light vehicle production by 0.7% globally, attributed to a negative regional mix [12][13] Company Strategy and Development Direction - The company is focused on expanding its presence in China, investing in a second R&D center to strengthen partnerships with Chinese OEMs [6][7] - A strategic agreement with CATARC aims to define the next generation of safety standards in the automotive sector [7][8] - The company plans to form a joint venture with HSAE to develop advanced safety electronics, targeting high-growth areas [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving financial targets despite anticipated challenges in the fourth quarter, including lower light vehicle production and geopolitical issues [25][26] - The outlook for the global auto industry has improved, particularly for North America and China, with expectations of sustained growth in Chinese light vehicle production over the medium term [23][24] Other Important Information - The company has committed to stock repurchases of $300 to $500 million annually and increased its quarterly dividend to $0.85 per share [6][17] - The leverage ratio remains low at 1.3 times, below the target limit of 1.5 times, reflecting prudent financial management [22] Q&A Session Summary Question: Why isn't organic sales benefiting from the stronger production environment? - Management explained that adjustments for past quarters and a larger negative market mix impacted organic sales guidance [30][31] Question: Was there anything unusual in the strong margin for Q3? - Management confirmed that a $50 million supplier compensation was one-time and highlighted the importance of internal improvement efforts [32][33] Question: Should Q4 trends be extrapolated into 2026? - Management expressed confidence in reaching midterm targets and noted that Q4 is typically the strongest quarter of the year [36][39] Question: Can you dimensionalize the headwinds for Q4? - Management indicated that engineering income would be the largest headwind, followed by the absence of out-of-period inflation compensation and increased depreciation [44][45] Question: How is the company positioned in the Chinese market? - Management noted strong growth with Chinese OEMs and ongoing investments, including a new R&D center [52][53] Question: What is the outlook for the European market? - Management remains cautious about the European market, primarily due to demand uncertainties [54] Question: How does the company view supplier contract trends? - Management stated that they do not foresee major concerns regarding contract negotiations with OEMs [76][77] Question: What is the impact of the recent supply issues on European production? - Management indicated it is too early to comment on potential impacts but emphasized their preparedness to manage supply chain constraints [80]

Core Insights - Adient and Autoliv have co-developed innovative safety solutions for zero-gravity seating, enhancing occupant protection in deeply reclined positions [1][4] - The Z-Guard system integrates advanced safety technologies and is ready for mass production, addressing the safety risks associated with conventional systems in deeply reclined seating [3][8] Group 1: Product Development - Adient's Z-Guard offers full-process occupant protection through intelligent seat, restraint, and predictive safety technologies [2] - The Z-Guard concept incorporates Multi-Dimensional Collaborative Protection, utilizing advanced constraint and energy-absorbing technologies for collision protection [5] - Key innovations include an Integrated Seatbelt System, Dynamic Lumbar Retractor, Pelvic Cushion Airbag, and Head Side Airbag, which collectively enhance safety in reclined positions [5] Group 2: Predictive Safety Features - The Z-Guard system integrates with vehicle driver assistance systems, using predictive signals for proactive posture adjustments before a collision [6] - In scenarios where a crash cannot be detected in time, Z-Guard employs dual pretensioners and a collapse mechanism to enhance occupant safety [7] Group 3: Market Readiness - The Z-Guard seating concept is designed to align with the evolving demands of software-defined vehicles, integrating safety features into smart cockpit environments [8] - Adient is set to lead the commercialization of Z-Guard, with plans for production in a high-volume model from a major global OEM [8]

Core Viewpoint - Adient plc (NYSE: ADNT) is an automotive seating-oriented company that has been experiencing a sustained down period in its share price, leading to a 'Hold' rating being reiterated in April of this year [1] Company Summary - The company focuses on deriving income from investment setups by purchasing undervalued profitable stocks with strong balance sheets and minimal debt [1] - The strategy includes writing calls against positions to generate additional income when opportunities arise [1] - Risk management is emphasized through position sizing and the use of trailing stop losses over time [1]

Core Viewpoint - Adient, a global leader in automotive seating, will host a conference call on November 5, 2025, to discuss its fourth quarter fiscal 2025 financial results [1]. Group 1: Company Overview - Adient operates with approximately 70,000 employees across 29 countries and has more than 200 manufacturing and assembly plants worldwide [3]. - The company specializes in producing and delivering automotive seating for all major original equipment manufacturers (OEMs), covering the entire process from research and design to engineering and manufacturing [3]. Group 2: Financial Communication - A live webcast of the upcoming conference call and presentation materials will be available on the Adient Investor Relations website [1]. - Participants can join the call by dialing specific telephone numbers provided for U.S. and international callers, with a passcode required for access [2].

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]

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]

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]