Adient Reports Mixed Q2, Reaffirms FY23 Guidance, Cautious On Unfavorable Macro Factors

• Adient PLC ADNT reported second-quarter FY23 sales growth of 12% Y/Y to $3.91 billion, beating the consensus of $3.76 billion.
• Revenues benefitted from higher volumes and slight commercial recoveries in the quarter. 
• Gross profit increased to $250 million from $175 million a year ago.
• Adjusted EBITDA improved 35% Y/Y to $215 million with a margin of 5.5% versus 4.5% a year ago.
• The company held $826 million in cash and equivalents and operating cash flow for the quarter amounted to $170 million as of March 31, 2023. Net debt of Adient totaled $1.7 billion.
• Adjusted EPS of $0.32 missed the analyst consensus of $0.43.
• 2023 Outlook Reiterated: Adient saw FY23 sales of about $15 billion versus the consensus of $15.09 billion and adjusted EBITDA of $850 million. 
• The company expects growth momentum to continue in H2 FY23 but is cautious due to weak vehicle demand in China and higher steel prices in North America. 
• Adient expects to generate around $215 million ($200 million prior) of FCF.
• ADNR Price Action: Adient shares are trading lower by 6.49% at $34.75 Wednesday at publication.

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