American Axle Cut to Underperform - Analyst Blog
15 Febbraio 2013 - 7:05PM
Zacks
On Feb 14, we downgraded driveline systems manufacturer,
American Axle and Manufacturing Inc. (AXL), to
Underperform based on the company’s poor performance in the fourth
quarter of 2012 and risks arising from the sluggish demand for
SUVs, high commodity costs and pricing pressure from OEMs.
Why the Downgrade?
American Axle reported a loss of $1.7 million or 2 cents per share
in the fourth quarter compared with a profit of $35.9 million or 47
cents in the year-ago quarter. The company’s loss considerably
lagged the Zacks Consensus Estimate of a profit of 17 cents.
Revenues increased 21.6% year over year to $736.7 million during
the quarter, surpassing the Zacks Consensus Estimate of $733
million.
Following the release of the fourth quarter results, the Zacks
Consensus Estimate for 2013 decreased 10.1% to $1.79 per share.
Moreover, the Zacks Consensus Estimate for 2014 also went down 6.5%
to $2.46 per share. With the Zacks Consensus Estimates for both
2013 and 2014 going down, the company retains a Zacks Rank #5
(Strong Sell).
American Axle remains challenged by constant pricing pressure from
the major OEM. In addition, the company is exposed to platforms,
which faces maximum production cuts. Sales and output levels of RWD
light truck and SUV in North America are declining over time, which
occupies a substantial portion of the company’s revenues.
Nevertheless, the company focuses on diversifying its customer
base, which will enhance its revenues. It develops customer
relationships with auto companies including Renault, Nissan
Motor Co. (NSANY), Tata, Mahindra, Cherry, Brilliance and
others.
Other Stocks to Consider
Commercial Vehicle Group Inc. (CVGI) and
Oshkosh Corporation (OSK) are performing well in
the same industry where American Axle operates. Both hold a Zacks
Rank #1 (Strong Buy).
AMER AXLE & MFG (AXL): Free Stock Analysis Report
COMML VEHICLE (CVGI): Free Stock Analysis Report
NISSAN ADR (NSANY): Free Stock Analysis Report
OSHKOSH CORP (OSK): Free Stock Analysis Report
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