Adient plc (ADNT) Friday reported a decline in fourth-quarter adjusted earnings, hurt mainly by higher operating costs. Revenues, meanwhile, increased and topped estimates. Shares of the automotive seating supplier dropped in the pre-market trading Friday following the announcement.
Adjusted earnings declined to $1.30 per share in the fourth quarter from $2.32 per share in the comparable period a year earlier, but came in above analysts’ forecast.
On an unadjusted basis, the company reported a net loss of $1.36 billion or $14.51 per share, compared to a profit of $0.34 billion or $3.67 per share a year earlier. The results were negatively impacted by $1.5 billion of one-time, non-cash charges, primarily associated with asset impairments and the recording of valuation allowances against certain deferred tax assets.
Net sales, meanwhile, increased 4.2% annually to $4.15 billion in the September quarter. The top-line was slightly above the Wall Street forecast. Sales of seating products rose 4% to $3.75 billion and those of seat structures & mechanisms grew 5%.
The results were negatively impacted by $1.5 billion of one-time, non-cash charges, primarily associated with asset impairments
Considering the ongoing slump in profitability, the management has decided to suspend the quarterly cash dividend from the second quarter of fiscal 2019, in an effort to achieve financial stability and debt reduction.
Doug DelGrosso, who took over as the CEO recently, said the financial guidance for fiscal 2019 will be provided in January. According to him, the operating challenges faced by the company this year are expected to have a major impact on its performance next year.
“I’m confident the challenges that impacted Adient’s FY2018 results are being addressed. The team is focused on executing our transformation plan to drive improved profitability, cash flow, and returns to our shareholders,” said DelGrosso.
Adient shares plunged 66% since January this year, all along underperforming the market, and closed Thursday’s trading down 3%. The stock dropped further in the premarket Friday following the earnings report.