AXL American Axle and Manufacturing Holdings Inc

American Axle and Manufacturing Inc. (AXL) reported a 22% increase in profits to $45.9 million or 61 cents per share in the first quarter of 2012 from $37.7 million or 50 cents per share in the corresponding quarter of last year (excluding special items). However, it missed the Zacks Consensus Estimate by 3 cents per share during the quarter.

Revenues in the quarter hiked 16% to $751.5 million from $645.6 million in the same quarter prior year. The increase in revenues was attributable to a boost in production volume across the major product programs along with improvement in capacity utilization. However, the company missed the Zacks Consensus Estimate of $765.0 million.

American Axle’s content-per-vehicle – dollar value of its product sales supporting General Motor’s (GM) North American light truck and SUV programs and Chrysler's heavy duty Dodge Ram pickup trucks –  declined marginally to $1,475 from $1,478 in the first quarter of 2011. Meanwhile, the company progressed well in diversifying its customer base during the quarter.

The company’s non-GM sales increased 8.5% over the year to $193.6 million from $178.4 million. Non-GM sales contribute 26% of total sales for the company.

Gross profit swelled by 18.5% year over year to $139.2 million or 18.5% of sales from $115.4 million or 17.9% of sales in the first quarter of 2011. Meanwhile, operating income was $77.4 million or 10.3% of sales compared with $58.7 million or 9.1% in the year-ago quarter.

American Axle had cash and cash equivalents of $112.8 million as of March 31, 2012, down from $169.2 million as of December 31, 2011. Total debt was $1.25 million as of March 31, 2012 compared with $1.18 billion as of December 31, 2011.

The company had an operating net cash outflow of $71.5 million compared to an inflow of $1.0 million in the first quarter of 2011. Net capital spending of the company was $43.6 million compared with $30.0 million in the same period of 2011. Therefore, American Axle had free cash flow use of $115.1 million in the quarter compared to the use of $29.0 million in the corresponding period in 2011.

American Axle is a leading supplier of driveline systems, modules and components for the light vehicle market. The company makes axles, driveshaft and chassis components for light trucks, sport utility vehicles and passenger cars. The company with its numerous new global product and process launches featuring advanced driveline technology, and customer diversification expects to grow in the future.

Currently, the company retains a Zacks #2 Rank on its stock, which translates into a rating of Buy for the short-term (1 to 3 months) and we reiterate our Neutral recommendation on its shares for the long term (more than 6 months).

 
AMER AXLE & MFG (AXL): Free Stock Analysis Report
 
GENERAL MOTORS (GM): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research