American Axle and Manufacturing Holdings Inc. (AXL) reported fourth-quarter 2014 adjusted earnings of 63 cents per share, surpassing the Zacks Consensus Estimate of 54 cents. However, earnings per share declined from 71 cents in the comparable quarter of 2013 (excluding special items).
Including a non-cash charge of $35.5 million related to the 2014 Pension Payout Offer, the company reported net income of $13.2 million or 17 cents per share, compared with $29.8 million or 39 cents per share in the fourth quarter of 2013. The year-ago quarter includes the impact of $25.6 million related to debt refinancing and redemption costs.
Revenues went up 13% to $939.5 million in the reported quarter from $831.3 million a year ago. Moreover, the top line surpassed the Zacks Consensus Estimate of $933 million.
American Axle’s content-per-vehicle – dollar value of product sales supporting customers’ North American light truck and sport utility vehicle (“SUV”) programs – increased 7.5% to $1,697 from $1,579 in fourth-quarter 2013. The company’s non-General Motors Company (GM) sales increased 13.2% to $317.2 million from $280.1 million in the year-ago quarter.
Gross profit declined 12.4% to $111.2 million (11.8% of sales) in fourth-quarter 2014 from $126.9 million (15.3% of sales) in the year-ago quarter. Meanwhile, operating income fell 41.9% to $38.6 million (4.1% of sales) from $66.4 million (8% of sales) a year ago.
2014 Results
American Axle recorded adjusted earnings of $2.31 per share in 2014, beating the Zacks Consensus Estimate of $2.27. In comparison, the company had generated earnings of $1.76 per share in 2013.
Including the impact of special items, net income (on a reported basis) amounted to $143 million or $1.85 per share, compared with $94.5 million or $1.23 per share in 2013.
Revenues increased 15.2% to $3.70 billion in 2014 from $3.21 billion in 2013, narrowly surpassing the Zacks Consensus Estimate of $3.69 billion.
Financial Position
American Axle had cash and cash equivalents of $249.2 million as of Dec 31, 2014, up from $154 million as of Dec 31, 2013. Long-term debt was $1.5 billion as of Dec 31, 2014, down from $1.6 billion as of Dec 31, 2013.
Cash flow from operations in 2014 was $318.4 million, compared with $223 million in 2013. Net capital spending of the company was $195.3 million, compared with $218.7 million in 2013. Therefore, American Axle had free cash flow of $123.1 million in 2014, compared with $4.3 million in 2013.
American Axle is a leading supplier of driveline systems, modules and components for the light vehicle market. The company makes axles, driveshaft and chassis components for light trucks, SUVs and passenger cars. Currently, it holds a Zacks Rank #2 (Buy).
Better-ranked automobile stocks include Superior Industries International, Inc. (SUP) and Wabash National Corp. (WNC), both sporting a Zacks Rank #1 (Strong Buy).
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