Financial Performance - Q3 FY2024 reported revenue was $3,716M, an 8% decrease compared to Q3 FY2023, with adjusted EBITDA of $202M, down 27% year-over-year[2] - Adjusted net income for Q3 FY2024 was $29M, with adjusted EPS diluted at $0.32, compared to a net loss of $11M and EPS diluted of $(0.12) in the same quarter last year[2] - Adient reported net sales of $3,716 million for the three months ended June 30, 2024, a decrease of 8.4% compared to $4,055 million for the same period in 2023[19] - The gross profit for the same period was $207 million, down from $302 million, reflecting a gross margin of 5.6%[19] - Adjusted EBITDA for the three months ended June 30, 2024, was $202 million, with an adjusted EBITDA margin of 5.4%[29] - Net income attributable to Adient was a loss of $11 million for the three months ended June 30, 2024, compared to a profit of $73 million in the same period last year[19] - Adjusted net income attributable to Adient was $29 million, down from $93 million in the previous year[39] - Adjusted diluted earnings per share decreased to $0.32 from $0.98 year-over-year[44] - Adjusted EBIT margin was 3.4% of net sales, down from 4.8% in the same quarter last year[38] - Total net sales for the quarter were $3,716 million, compared to $4,055 million in the prior year[38] Cash Flow and Debt - The company generated free cash flow of $88M in Q3 FY2024, compared to $143M in Q3 FY2023[10] - Cash provided by operating activities was $158 million for the three months ended June 30, 2024, down from $203 million in the prior year[26] - Net debt as of June 30, 2024, was $1,647 million, an increase of 15.6% from $1,425 million as of September 30, 2023[54] - Total debt as of June 30, 2024, was $2,537 million, slightly up from $2,535 million as of September 30, 2023[54] - The net leverage ratio increased to 1.87 as of June 30, 2024, from 1.52 as of September 30, 2023[53] Segment Performance - The Americas segment reported adjusted EBITDA of $99M, while EMEA and Asia reported $25M and $101M, respectively, with overall performance impacted by lower customer production[8] - Adient's Americas segment generated net sales of $1,737 million, while the EMEA and Asia segments reported $1,288 million and $712 million, respectively[29] - Adjusted EBITDA for the Americas segment was $99 million, up from $95 million in the same period last year, while EMEA dropped to $25 million from $103 million[31] Outlook and Strategic Initiatives - The FY2024 outlook was updated to reflect consolidated sales of approximately $14.6B, down from a prior estimate of $14.8B-$14.9B[12] - Adient China is expected to drive double-digit growth in the coming years, focusing on innovation in seating comfort, connectivity, and sustainability[4] - The company is advancing automation and AI tools to improve operational efficiency and reduce costs[5] - The company is focused on deleveraging activities and expects to improve its financial position in the upcoming quarters[16] Costs and Expenses - Corporate-related costs increased to $(23) million from $(22) million year-over-year[31] - Restructuring and impairment costs rose to $(16) million from $(6) million in the same period last year[31] - The company reported a net financing charge of $(48) million, slightly down from $(49) million in the previous year[31] - Adjusted equity income for Q2 2024 was $23 million, down 14.8% from $27 million in Q2 2023[46] - Net financing charges for Q2 2024 were $48 million, unchanged from Q2 2023[48] - Operating cash flow for Q2 2024 was $158 million, a decrease of 22.1% compared to $203 million in Q2 2023[50] - Free cash flow for Q2 2024 was $88 million, down 38.5% from $143 million in Q2 2023[51] - Adjusted EBITDA for Q2 2024 was $202 million, a decline of 26.9% from $276 million in Q2 2023[51] - Capital expenditures for Q2 2024 were $70 million, compared to $60 million in Q2 2023[50] Taxation - The company reported an adjusted effective tax rate of 40% for the three months ended June 30, 2024[17] - The effective tax rate for the three months ended June 30, 2024, was 88.9%, significantly higher than 22.8% in 2023[41]

Financial Performance - Adient reported a Q3 2024 GAAP net loss of $11 million and a diluted EPS of $(0.12), while the adjusted EPS was $0.32 [1] - The adjusted EBITDA for Q3 was $202 million, impacted by lower customer production [1] - The company generated free cash flow of $88 million during the quarter [1] Debt and Cash Position - As of June 30, 2024, Adient's gross debt and net debt were approximately $2.5 billion and $1.6 billion, respectively, with cash and cash equivalents totaling $890 million [1] - The company executed $75 million in share repurchases, retiring about 2.6 million shares in the quarter, bringing year-to-date repurchases to $225 million and approximately 7.1 million shares [1] Outlook and Market Conditions - Adient updated its FY24 outlook, acknowledging the effects of lower vehicle production expectations [1] - The company operates over 200 manufacturing and assembly plants globally, producing automotive seating for all major OEMs [3]

Group 1 - Adient will participate in the J.P. Morgan Auto Conference on August 8, 2024, with a fireside chat featuring CEO Jerome Dorlack and CFO Mark Oswald at 10:15 AM Eastern Time [1] - A live webcast of the fireside chat will be available on the investor section of Adient's website [1] Group 2 - Adient is a global leader in automotive seating, employing over 70,000 people across 29 countries [2] - The company operates more than 200 manufacturing and assembly plants worldwide, producing automotive seating for all major OEMs [2] - Adient's expertise covers the entire automotive seat-making process, from research and design to engineering and manufacturing [2]

Earnings Expectations for Adient - Wall Street expects Adient to report a year-over-year decline in earnings and revenues for the quarter ended June 2024, with earnings per share (EPS) expected at $0.67, down 31.6% YoY, and revenues expected at $3.81 billion, down 6% YoY [1][2] - The consensus EPS estimate has remained unchanged over the last 30 days, reflecting analysts' collective reassessment of initial estimates [3] - The Most Accurate Estimate for Adient is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -7%, indicating analysts have recently become bearish on the company's earnings prospects [6] Earnings Surprise History and Predictions - Adient delivered a positive earnings surprise of +38.46% in the last reported quarter, beating the consensus EPS estimate of $0.39 with actual earnings of $0.54 [7] - Over the last four quarters, the company has beaten consensus EPS estimates two times [7] - A positive Earnings ESP combined with a Zacks Rank of 1, 2, or 3 has historically resulted in a positive earnings surprise nearly 70% of the time, but Adient currently carries a Zacks Rank of 5, making it difficult to predict an earnings beat [5][6] Industry Comparison - Magna, another player in the Zacks Automotive - Original Equipment industry, is expected to post earnings of $1.54 per share for the quarter ended June 2024, representing a YoY increase of 2.7%, with revenues expected at $11.12 billion, up 1.3% YoY [9] - Magna's consensus EPS estimate has been revised down by 3% over the last 30 days, and the company now has an Earnings ESP of -5.84%, combined with a Zacks Rank of 4, making it difficult to predict an earnings beat [9] - Over the last four quarters, Magna has surpassed consensus EPS estimates two times [9]

Company Overview - Adient is a global leader in automotive seating with over 70,000 employees across 29 countries [2] - The company operates more than 200 manufacturing and assembly plants worldwide [2] - Adient produces and delivers automotive seating for all major OEMs, covering the entire seat-making process from research and design to engineering and manufacturing [2] Upcoming Financial Event - Adient will host a conference call on August 6, 2024, at 8:30 a.m. (ET) to discuss its third quarter fiscal 2024 financial results [1] - A live webcast of the call and presentation materials will be available on the Adient Investor Relations website [1] - Participants can join the call by dialing specific telephone numbers and using the conference passcode ADIENT [1]

Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List due to downward revisions in earnings estimates over the last 60 days [1] Company Summaries - **Adient plc (ADNT)**: An automotive seating supplier with a current year earnings estimate revised downward by 10.7% [1] - **ArcBest Corporation (ARCB)**: A freight transportation and integrated logistics services company with a current year earnings estimate revised downward by 15% [1] - **The GEO Group, Inc. (GEO)**: A company that owns, leases, and manages secure facilities, with a current year earnings estimate revised downward by 3.8% [1]

Group 1 - ARMOUR Residential REIT (ARR) primarily invests in residential mortgage-backed securities issued or guaranteed by a United States Government-chartered entity [1] - The Zacks Consensus Estimate for ARMOUR's current year earnings has been revised downward by almost 14.8% over the last 60 days [1] - Adient (ADNT) is one of the world's largest automotive seating suppliers [1] - The Zacks Consensus Estimate for Adient's current year earnings has been revised downward by 11.9% over the last 60 days [1] - Americas Gold and Silver (USAS) is a metal producer engaged in the exploration, development, operation, and acquisition of precious metal properties [1] - The Zacks Consensus Estimate for Americas Gold and Silver's current year earnings has been revised downward by 57.1% over the last 60 days [1]

Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List due to significant downward revisions in earnings estimates over the last 60 days [1] Company Summaries - **Adient plc (ADNT)**: An automotive seating supplier with a current year earnings estimate revised downward by 14.6% [1] - **ArcBest Corporation (ARCB)**: A freight transportation and integrated logistics services company with a current year earnings estimate revised downward by 15% [1] - **Civista Bancshares, Inc. (CIVB)**: The financial holding company for Civista Bank, with a current year earnings estimate revised downward by 13.2% [1]

Group 1 - Adient plc (ADNT), an automotive seating supplier, has seen its current year earnings estimate revised downward by 15.9% over the last 60 days [1] - California BanCorp (CALB), the bank holding company for California Bank of Commerce, has experienced a 3.6% downward revision in its current year earnings estimate over the last 60 days [1] - CareTrust REIT, Inc. (CTRE), a publicly-traded real estate investment trust, has had its current year earnings estimate revised downward by 5.2% over the last 60 days [1]

Group 1 - Boot Barn Holdings, Inc. (BOOT) is a lifestyle retail chain with a current year earnings estimate revised downward by 8.2% over the last 60 days [1] - Capri Holdings Limited (CPRI) is a retailer of apparels, experiencing a 14.7% downward revision in its current year earnings estimate over the last 60 days [1] - Adient plc (ADNT) is an automotive seating supplier, with its current year earnings estimate revised downward by 16.8% over the last 60 days [1]