It has been about a month since the last earnings report for Adient (ADNT). Shares have lost about 15.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Adient due for a breakout? 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 catalysts.
Adient Misses Q1 Earnings Estimates
Adient reported adjusted earnings per share of 31 cents, missing the Zacks Consensus Estimate of 48 cents. The adjusted bottom-line figure in the year-ago quarter was $1.05 per share. The decline was due to negative business performance, owing to launch inefficiencies.
During the quarter under review, Adient reported net sales of $4.16 billion, marking a decline from $4.2 billion recorded in first-quarter fiscal 2018. Further, the top line missed the Zacks Consensus Estimate of $4.17 billion.
Net income attributed to Adient was $17 million against net loss of $216 million in the prior-year quarter.
Quarter in Detail
During the reported quarter, the Seating segment of the company reported net sales of $3.7 billion, down from $3.8 billion in first-quarter fiscal 2018. The segment’s adjusted EBIDTA was $261 million compared with $354 million recorded in the prior-year quarter.
The Seat Structures & Mechanisms (“SS&M”) segment reported net sales of $727 million, up from $718 million in the prior-year quarter. Adjusted EBITDA for this segment amounted to negative $72 million compared with negative $82 million in the first quarter of the previous fiscal year.
Financials
Adient had cash and cash equivalents of $406 million as of Dec 31, 2018, compared with $687 million as of Sep 30, 2018. As of the same date, net debt amounted to $3 billion, up from $2.7 billion as of Sep 30, 2018.
In the first three months of fiscal 2019, cash used by operating activities was $128 million, almost similar to the same period of fiscal 2018. Capital expenditure rose to $144 million from $143 million recorded in the first quarter of the prior fiscal year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month. The consensus estimate has shifted -55.23% due to these changes.
VGM Scores
At this time, Adient has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Adient has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Adient PLC (ADNT): Free Stock Analysis Report
Original post
Zacks Investment Research