Supplier Adient reported a net loss of $168 Million for the second fiscal quarter of 2018, in contrast to a net profit of $190 Million in the previous year, impacted by the headwinds in the seat structure and mechanization business of the company, attached with weakness in the interiors.
In a teleconference with analysts, Jeff Stafeil, CFO of the company said, the biggest particular item was a “non-cash goodwill impairment” of $279 Million related to the rearrangement of the seat-structure business.
Attuned earnings prior to interest, depreciation, taxes, and amortization fell by 14% to $363 Million. Total revenue increased to 9.4% to $4.5 Billion in the quarter ended March. Net debt increased from $2.76 Billion as of September 30, 2017, to $3.32 Billion.
“It is important that we focus in the past on what happened, but for the moment, the team is focusing on the future and what can be done to turn this business around,” said CEO Bruce McDonald on the call.
The company will not reach its previous target of increasing seat base profit margins by 2% points by 2020. The company’s accustomed earnings margin slumped from 7.9% in the same quarter of the previous year to 5.5% recently.
“The profound slow down in this segment will avert Adient from accomplishing the consolidated margin development target of 200 basis points for the fiscal year 2020,” the company said on Thursday in its shareholder presentation.
Despite the headwind in its seating business, the provider said that the business in China will continue to develop robustly.
“There is a lot of self-help to drive the short-term margin growth in the automotive business,” wrote the analysts of Wells Fargo in a report. “In addition, the company’s sturdy existence in China should lead to optimistic stock performance.”
Adient, headquartered in Plymouth, Michigan, USA, is ranked 11 in the automotive news list of the world’s top 100 global suppliers, with $16.84 Billion worldwide spare parts sales to automakers in 2016.
Before turning out to be a full-time writer and editor, James Tidwell was a blogger who wrote his outlooks and viewpoints relating to Entertainment and Sports. Owing to his interest and absolute fineness of playing with world beautifully, he was appointed to dabble in Entertainment and Sports world.