Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List due to significant downward revisions in their earnings estimates over the last 60 days [1] Company Summaries - **3D Systems Corporation (DDD)**: This company specializes in 3D printing and digital manufacturing solutions. The Zacks Consensus Estimate for its current year earnings has been revised downward by 11.1% over the last 60 days [1] - **Adient plc (ADNT)**: An automotive seating supplier, Adient has seen its Zacks Consensus Estimate for current year earnings revised downward by 16.8% over the last 60 days [1] - **Allegiant Travel Company (ALGT)**: A leisure travel company, Allegiant's Zacks Consensus Estimate for current year earnings has been revised downward by 37.6% over the last 60 days [1]

Core Viewpoint - Adient reported adjusted earnings per share (EPS) of 54 cents for Q2 fiscal 2024, an increase from 32 cents in the previous year, surpassing the Zacks Consensus Estimate of 39 cents [1] Financial Performance - The company generated net sales of $3.75 billion, a decrease of 4.1% year over year, missing the Zacks Consensus Estimate of $3.83 billion [1] - Cash and cash equivalents stood at $905 million as of March 31, 2024, down from $1.11 billion as of September 30, 2023 [4] - Long-term debt was reported at $2.4 billion as of March 31, 2024 [4] - Capital expenditures totaled $69 million, compared to $56 million in the prior-year quarter [4] - During the quarter, Adient repurchased nearly 1.5 million shares for $50 million [4] Segmental Performance - The Americas segment recorded revenues of $1.66 billion, down 5.7% year over year, missing the Zacks Consensus Estimate of $1.80 billion; adjusted EBITDA increased to $80 million from $72 million [2] - The EMEA segment generated revenues of $1.37 billion, a decline of 2.2% year over year, missing the Zacks Consensus Estimate of $1.38 billion; EBITDA rose to $57 million from $53 million [3] - The Asia segment reported revenues of $742 million, down 4.1% year over year, missing the Zacks Consensus Estimate of $774 million; adjusted EBITDA fell 0.8% year over year to $112 million [3] Revised Guidance for 2024 - Adient revised its fiscal 2024 revenue guidance to a range of $14.8-$14.9 billion, down from $15.40-$15.50 billion; adjusted EBITDA is now estimated at $900-$920 million, down from $985 million [5] - Equity income is projected to be $80 million, an increase from the previous guidance of $70 million [5] - Free cash flow is anticipated to be $250 million, down from the previous guidance of $300 million [5] - Capital expenditures and cash tax are estimated between $310 million and $105 million, respectively; interest expenses are expected to be $185 million [5]

Group 1 - Atlas Energy Solutions Inc. (AESI) provides proppant and logistics services primarily in the Permian Basin of West Texas and New Mexico, with a current year earnings estimate revised down by almost 27% over the last 60 days [1] - Aegon (AEG) is an international insurance group offering life and health insurance, pension, savings, and investment products across Europe, North America, and the Caribbean, with a current year earnings estimate revised down by 11.5% over the last 60 days [1] - Adient (ADNT) is one of the largest automotive seating suppliers globally, with a current year earnings estimate revised down by 10.8% over the last 60 days [1]

Core Viewpoint - Adient's international operations are crucial for assessing its financial strength and growth potential, especially in a globally interconnected economy [1][2]. Group 1: International Revenue Performance - In the recent quarter, Adient's total revenue was $3.75 billion, a decline of 4.1% year-over-year [2]. - Asia contributed $742 million, or 19.8% of total revenue, which was a surprise of -4.07% compared to the consensus estimate of $773.51 million [3]. - EMEA generated $1.37 billion, accounting for 36.5% of total revenue, slightly below the expected $1.38 billion, representing a surprise of -0.63% [3]. Group 2: Future Revenue Projections - Analysts project total revenue for the current fiscal quarter to reach $4.06 billion, reflecting a 0.1% increase from the same quarter last year [4]. - For the full year, total revenue is expected to be $15.44 billion, indicating a 0.3% increase year-over-year [4]. - Revenue contributions from Asia and EMEA for the full year are anticipated to be $3.13 billion (20.3%) and $5.27 billion (34.1%), respectively [4]. Group 3: Stock Performance and Market Position - Adient's stock has decreased by 9.6% over the past month, while the Zacks S&P 500 composite fell by only 0.4% [7]. - Over the last three months, Adient's shares declined by 19%, contrasting with a 4.9% increase in the S&P 500 [7]. - The company currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance compared to the broader market in the near term [6].

Financial Performance - Adient recorded net sales of $3,750 million for Q2 fiscal 2024, a decrease of $162 million or 4.1% compared to Q2 fiscal 2023, primarily due to lower production volumes in the Americas and EMEA regions [136]. - Gross profit for Q2 fiscal 2024 was $230 million, or 6.1% of net sales, down from $250 million or 6.4% in Q2 fiscal 2023, attributed to lower production volumes and unfavorable foreign currency impacts [137]. - Net loss attributable to Adient was $70 million in Q2 fiscal 2024, compared to a net loss of $15 million in Q2 fiscal 2023, mainly due to higher restructuring costs and unfavorable foreign currency impacts [139]. - Adient's net sales for the first six months of fiscal 2024 decreased by $201 million, or 3%, compared to the same period in fiscal 2023, due to lower production volumes across all regions [142]. - Net sales for the three months ended March 31, 2024, decreased by 6% to $1,660 million compared to $1,761 million in the same period of 2023 [169]. - Net sales for the six months ended March 31, 2024, decreased by 5% to $3,307 million compared to $3,485 million in the same period of 2023 [169]. - Comprehensive loss attributable to Adient was $168 million for the second quarter of fiscal 2024, a decrease of $196 million compared to comprehensive income of $28 million in the same quarter of fiscal 2023 [159]. Cost and Expenses - Cost of sales decreased by $142 million, or 4%, in Q2 fiscal 2024, while gross profit decreased by $20 million, or 8%, compared to Q2 fiscal 2023 [144]. - Selling, general and administrative expenses decreased by 18% to $115 million in Q2 fiscal 2024, down from $141 million in Q2 fiscal 2023 [140]. - Cost of sales decreased by $196 million, or 3%, and gross profit decreased by $5 million, or 1%, in the first six months of fiscal 2024 compared to the same period in fiscal 2023 [145]. - SG&A expenses decreased by $26 million, or 18%, in the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023 [146]. - Restructuring and impairment costs surged over 100% to $125 million in Q2 fiscal 2024, compared to $17 million in Q2 fiscal 2023 [140]. - Restructuring actions under the "2024 Plan" resulted in charges of $138 million, expected to reduce annual operating costs by approximately $80 million upon completion [188]. Equity and Income - Equity income increased to $18 million in Q2 fiscal 2024 from $4 million in Q2 fiscal 2023, driven by favorable production volumes at partially-owned affiliates [138]. - Equity income was $18 million for the second quarter of fiscal 2024, a significant increase from $4 million in the same quarter of fiscal 2023 [150]. - Income tax provision for the second quarter of fiscal 2024 was $8 million, a decrease of 68% compared to $25 million in the same quarter of fiscal 2023 [155]. Market Conditions - The automotive industry is facing inflationary pressures and volatile commodity pricing, impacting Adient's operating environment [133]. - The decrease in net sales during the second quarter of fiscal 2024 was primarily due to lower production volumes from slower product launches, totaling a negative impact of $103 million [170]. - The unfavorable impact of foreign currencies on net sales was $2 million for the three months ended March 31, 2024 [170]. Financing and Liquidity - Adient believes its current financial resources will be sufficient to fund its liquidity requirements for at least the next twelve months [179]. - Adient maintains an asset-based revolving credit facility with a total line of credit up to $1,250 million, including $950 million for North America and $300 million for Europe, with $974 million available as of March 31, 2024 [180]. - The Term Loan B Agreement had an outstanding balance of $635 million as of March 31, 2024, with an amended maturity date extended to January 31, 2031, and a reduced applicable margin from 3.25% to 2.75% [181]. - Adient issued $500 million in senior secured notes and $500 million in senior unsecured notes in March 2023, with total net proceeds of $988 million used primarily to redeem $350 million of the Term Loan B Agreement [183]. Operational Efficiency - Operating cash flows decreased to $122 million for the six months ended March 31, 2024, down from $170 million year-over-year, primarily due to a higher net loss [185]. - Working capital decreased by $111 million to $467 million as of March 31, 2024, due to decreases in cash and inventories [187]. - The company experienced an increase in capital expenditures to $124 million for the first six months of fiscal 2024, attributed to timing of program spend on product launches [186]. - Adient's management continues to analyze operations for efficiency improvements and cost reductions in response to changes in the automotive market [189]. - The company continues to monitor market conditions within the automotive industry and may consider further restructuring actions as needed [149].

FY2024 Second Quarter Earnings Call May 3, 2024 ...

Financial Performance - Q2 FY2024 revenue was $3,750M, a 4% decrease year-over-year, primarily due to lower volumes and FX headwinds[2] - Adjusted EBITDA for Q2 FY2024 was $227M, up $12M year-over-year, with an adjusted EBITDA margin of 6.1%, reflecting a 60 basis points improvement[2] - The company reported a net loss of $(70)M for Q2 FY2024, with adjusted net income of $49M, representing a 58% increase year-over-year[2] - Adient reported net sales of $3,750 million for the three months ended March 31, 2024, a decrease of 4.1% compared to $3,912 million in the same period of 2023[18] - The gross profit for the quarter was $230 million, down from $250 million year-over-year, reflecting a gross margin of 6.1%[18] - Adjusted EBITDA for the three months ended March 31, 2024, was $227 million, compared to $215 million for the same period in 2023, reflecting an increase of 5.6%[38] - Adjusted net income attributable to Adient for the three months ended March 31, 2024, was $49 million, up from $31 million in the same period in 2023, representing a 58.1% increase[39] - Adjusted EBIT for the three months ended March 31, 2024, was $147 million, compared to $134 million for the same period in 2023, indicating a growth of 9.7%[38] - The adjusted EBITDA margin for the three months ended March 31, 2024, was 6.1%, compared to 5.5% for the same period in 2023, showing an improvement of 0.6 percentage points[38] - Basic and diluted earnings per share for the three months ended March 31, 2024, were both $(0.77), compared to $(0.16) for the same period in 2023[33] Cash Flow and Capital Management - Cash and cash equivalents stood at $905M as of March 31, 2024, down from $1,110M at the end of FY2023[6] - The company reported free cash flow of $(2)M year-to-date FY2024, compared to $53M in the same period last year[6] - Cash provided by operating activities was $81 million, down from $126 million year-over-year[25] - Operating cash flow for Q1 2024 was $81 million, down from $126 million in Q1 2023, highlighting challenges in cash generation[49] - Free cash flow for the three months ended March 31, 2024, was $12 million, down from $70 million in the same period of 2023, primarily due to increased capital expenditures[49] - Capital expenditures for the three months ended March 31, 2024, were $69 million, compared to $56 million in the same period of 2023, reflecting ongoing investments in growth[49] Shareholder Actions - Year-to-date share repurchases totaled $150M, retiring approximately 4.5M shares, with $385M remaining in the current share repurchase authorization[1] Future Guidance - The company expects FY2024 consolidated sales to be in the range of $14.8B to $14.9B, down from prior guidance of $15.4B to $15.5B[8] - Adient anticipates adjusted EBITDA for FY2024 to be between $900M and $920M, revised from a previous estimate of $985M[8] Restructuring and Cost Management - The company plans to implement restructuring actions with $125M in charges expected in Q2 FY2024, aimed at achieving ~$60M in reduced annual operating costs by FY2027[2] - The company incurred restructuring and impairment costs of $125 million in the latest quarter, significantly higher than $17 million in the prior year[18] - The company is focused on restructuring plans and managing input cost recoveries amid ongoing economic uncertainties[16] Segment Performance - The Americas segment generated net sales of $1,660 million, while EMEA and Asia reported $1,370 million and $742 million, respectively[28] Debt and Financial Health - Adient's long-term debt remained stable at $2,401 million, with total liabilities amounting to $3,658 million[21][22] - The net debt as of March 31, 2024, was $1.63 billion, an increase from $1.43 billion as of September 30, 2023, reflecting changes in cash and debt management[53] - The company reported a net leverage ratio of 1.71 as of March 31, 2024, compared to 1.52 in the previous period, indicating a slight increase in leverage[52] - The net leverage ratio is calculated as net debt divided by adjusted EBITDA for the last four quarters, providing insight into the company's financial health[34] Equity and Investment Performance - Equity income for the three months ended March 31, 2024, was $18 million, compared to $4 million in the same period of 2023, indicating strong performance in equity investments[45] - Net financing charges decreased to $47 million in Q1 2024 from $59 million in Q1 2023, showing effective cost management[47]

Financial Performance - Q2 GAAP net income and EPS diluted were $(70)M and $(0.77), respectively, while Q2 Adj-EPS diluted was $0 54 [1] - Q2 Adj-EBITDA increased by $12M y-o-y to $227M, with Adj-EBITDA margin improving by 60 bps to 6 1% [1] - Gross debt and net debt stood at ~$2 5B and ~$1 6B, respectively, as of March 31, 2024, with cash and cash equivalents totaling $905M [1] Share Repurchases - The company repurchased $50M worth of shares in Q2, retiring ~1 5M shares, bringing year-to-date share repurchases to $150M and ~4 5M shares [1] FY24 Outlook Update - The company updated its FY24 outlook, citing slow ramp of launches, adverse customer mix, and softer electric vehicle production in the Americas and EMEA [1] Conference Call - Adient's president and CEO, Jerome Dorlack, and CFO, Mark Oswald, will host a conference call to discuss the results at 8:30 a m Eastern today [2] Company Overview - Adient is a global leader in automotive seating with 70,000+ employees in 29 countries and operates more than 200 manufacturing/assembly plants worldwide [3] - The company produces and delivers automotive seating for all major OEMs, covering complete seating systems to individual components [3]

Company Layoffs and Restructuring - Adient plans to cut jobs overseas and shift positions to countries with lower labor costs to reduce expenses [1] - The exact number of job cuts is unknown, but the company is moving some positions out of Europe [1] - Adient expects to incur $125 million in restructuring charges and save $60 million annually starting in 2027 [1] Financial Performance and Market Reaction - Adient's Q1 results showed lackluster sales, prompting the layoffs and job shifts [1] - ADNT stock is up slightly on Monday but down 20 9% year-to-date [2] Industry Trends - Adient joins a growing list of companies announcing layoffs to combat a tough economy [2] - Inflation continues to weigh on both consumers and businesses, leading to headcount reductions [2] Related Market News - Other notable stock market stories include Nike layoffs and Salesforce stock falling [2]

Core Viewpoint - Adient reported adjusted earnings per share (EPS) of 31 cents for Q1 fiscal 2024, a decline from 34 cents in the previous year and below the Zacks Consensus Estimate of 47 cents. Net sales were $3.66 billion, down 1% year over year, also missing the consensus estimate of $3.72 billion [1]. Segmental Performance - The Americas segment generated revenues of $1.65 billion, a 4% decline year over year, but exceeded the Zacks Consensus Estimate of $1.64 billion. Adjusted EBITDA for this segment was $80 million, up from $69 million in the prior year, surpassing the consensus estimate of $57 million [2]. - The EMEA segment reported revenues of $1.27 billion, a 7.6% increase year over year, exceeding the Zacks Consensus Estimate of $1.25 billion. EBITDA for this segment was $45 million, up from $28 million in the previous year, also beating the consensus estimate of $40.99 million [3]. - The Asia segment's revenues were $770 million, down 6.2% year over year, missing the Zacks Consensus Estimate of $844 million. Adjusted EBITDA fell 17.4% year over year to $114 million due to program transitions and timing of recoveries [3]. Financial Position - As of December 31, 2023, Adient had cash and cash equivalents of $990 million, down from $1.11 billion as of September 30, 2023. Long-term debt was $2,403 million, slightly up from $2,401 million [4]. - Capital expenditures for Q1 fiscal 2024 totaled $55 million, compared to $61 million in the prior-year quarter. The company repurchased nearly three million shares for $100 million during the quarter [4]. Revised Guidance 2024 - Adient revised its fiscal 2024 revenue guidance to a range of $15.40-$15.50 billion, down from the previous estimate of $15.60-$15.70 billion. Adjusted EBITDA is now estimated at $985 million, reduced from $1.01 billion. Free cash flow is projected at $300 million, with interest expenses and cash tax estimated between $185 million and $105 million, respectively [5].