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ADNT NYSE· Adient PLC
Earnings report Q4 2023

Adient's Revenue Declines Slightly in Q1 2024

Segments of revenue

Adient recorded net sales of $3.66 billion in the first quarter of fiscal 2024, representing a decrease of $39 million or 1.1% compared to the same quarter in fiscal 2023. The decline in net sales can be attributed to lower overall production volumes in the Americas and Asia regions due to UAW strike-related production disruptions, as well as unfavorable material economics recoveries. However, this decrease was partially offset by the favorable impact of foreign currencies and favorable pricing.

Strengths

Despite the slight decline in revenue, Adient's gross profit increased to $246 million, or 6.7% of net sales, in Q1 2024, compared to $231 million, or 6.2% of net sales, in Q1 2023. This improvement in profitability can be attributed to various factors, including favorable business performance, net favorable pricing adjustments, lower income tax provision, lower other pension expense, and favorable material economics, net of recoveries. Adient's management has highlighted these positive factors as contributing to the higher net income in Q1 2024.

Challenges

Adient faced challenges in the form of lower overall production volumes, mainly due to UAW strike-related disruptions in the Americas and Asia regions. Additionally, the company experienced higher selling, general, and administrative expenses, primarily driven by a one-time loss on business divestiture. Adient also had to contend with unfavorable impacts from foreign currencies, higher net financing charges, higher restructuring costs, lower equity income, and higher income attributable to noncontrolling interests, which negatively affected its net income.

Noteworthy

It is worth noting that Adient's net income attributable to the company increased to $20 million in Q1 2024, compared to $12 million in Q1 2023. This improvement in net income can be attributed to the favorable business performance, net favorable pricing adjustments, lower income tax provision, lower other pension expense, and favorable material economics, net of recoveries. However, it is important to consider the various factors that influenced the net income, including the challenges faced by the company.

Summary

Adient's revenue declined slightly in the first quarter of fiscal 2024, primarily due to lower production volumes and unfavorable material economics recoveries. However, the company managed to improve its profitability, with gross profit as a percentage of net sales increasing. Adient's net income also saw an improvement, driven by favorable business performance and other factors. Despite these positive aspects, the company faced challenges such as lower production volumes, higher expenses, and unfavorable currency impacts. Overall, Adient's financial performance in the latest quarter reflects a mixed picture, with both strengths and challenges impacting its results.

Source documents

Form 10-Q  filed on Feb 07, 2024
79 pages scanned

Reference data

Company financials Q4 revenue 3.66B
Analyst estimates Q4 EPS missed by -49.36%
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