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A month has gone by since the last earnings report for American Axle & Manufacturing (AXL). Shares have added about 12.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is American Axle due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
American Axle Posts Q2 Loss, Tops Sales Estimates
American Axle posted second-quarter 2020 adjusted loss of $1.79 per share, narrower than the Zacks Consensus Estimate of a loss of $2.06 on higher-than-anticipated revenues. Last year, the firm posted profits of 55 cents a share.
The Detroit-based global automotive parts supplier reported revenues of $555 million, which beat the Zacks Consensus Estimate of $411 million. Revenues, however, nosedived 69.7% from the year-ago figure of $1,704.3 million.
The dismal year-over-year performance is attributed to coronavirus-led demand. Per the company, coronavirus woes impacted sales to the tune of $947 million for the quarter under review.
Key Takeaways
The firm’s Driveline segment recorded sales of $403.7 million, down 65.8% year over year. The unit posted a negative EBITDA of $31.2 million against a positive EBITDA of $162.1 million in the prior-year quarter.
The company’s Metal Forming business generated revenues of $150.3 million, which plunged from the year-ago figure of $484.2 million. The segment incurred a loss of $20.9 million against the prior year’s income of $86.5 million.
American Axle’s second-quarter 2020 SG&A (selling, general & administrative) expenses totaled $73.8 million, down from $91.3 million incurred in the prior-year period.
For the three-month period ended Jun 30, 2020, the company posted negative adjusted free cash flow (FCF) of $161.8 million versus positive adjusted FCF of $119.3 million in the year-earlier period. Capital spending for the quarter came in at $35 million, down from the year-ago period’s $111.9 million.
As of Jun 30, 2020, American Axle had cash and cash equivalents of $893.3 million compared with $532 million on Dec 31, 2019. The company had net long-term debt of $3,561.4 million as of Jun 30, 2020, down from $3,612.3 million on Dec 31, 2019.
Amid COVID-19-led uncertainty, American Axle has refrained from providing any guidance for full-year 2020.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision. The consensus estimate has shifted -36.19% due to these changes.