Despite reporting another quarterly net loss, Adient predicted improved earnings for its 2020 fiscal year amid its multiyear restructuring effort.
The automotive seating supplier reported a net loss of $4 million, compared with a loss of $1.36 billion a year ago, which included $809 million in restructuring and impairment costs. Adjusted net income fell 52 percent to $59 million, the company said.
Revenue during the quarter fell 5 percent to $3.92 billion.
The fourth fiscal quarter loss represents the fifth straight quarter in the red, as the company continues to restructure under CEO Doug DelGrosso, who was hired in September 2018.
For its 2019 fiscal year, Adient reported a net loss of $491 million compared with a loss of $1.7 billion in 2018. Revenue fell 5 percent to $16.5 billion. Adjusted earnings before interest, taxes and other adjustments (known as EBITDA) fell 34 percent to $787 million.
The company said it expects improved earnings and cashflow for its 2020 fiscal year. Its guidance calls for adjusted EBITDA of $820 million to $860 million and total revenue of between $15.6 billion and $15.8 billion. The company said cashflow should be breakeven.
“Adient’s self-help initiatives are expected to result in improved earnings and cash flow in FY20, continuing the momentum established in the second half of FY19," DelGrosso said in a statement. "While the team made solid progress in advancing the turnaround plan in FY19, we recognize and are encouraged by the significant opportunity that lies ahead as we continue to execute the plan."
2019 results
Adient attributed the improving results in 2019 on stabilizing performance of its Warren Bridgewater plant, improved launch success and reduction of premium freight costs from mismanaged programs.
At its Warren plant in suburban Detroit, Adient has reduced customer disruptions — shipments that miss customer deadlines — from more than 10 per month during its first fiscal quarter of 2019 down to fewer than one per month in the fourth quarter, according to its investor presentation.
Launch costs in the Americas has also declined 40 percent during 2019 as well as a 23 percent reduction in Europe, Middle East and Africa. Premium freight costs — shipments that are expedited usually via an airplane — dropped 73 percent in 2019 versus 2018 for its Americas division and down 59 percent for its Europe, Middle East and Africa division.
Adient's report pleased Wall Street. Shares in the company gained 8.5 percent to $25.51 in midday trading. Year-to-date, its shares are up 56 percent.
Adient, based in suburban Detroit, ranks No. 13 on the Automotive News Europe list of the top 100 global suppliers with worldwide sales to automakers of $17.4 billion in 2018.
Automotive News contributed to this report.
