Automotive Seating Leader Adient Performance Succumbs To Demand Volatility

Adient Plc (NYSE:ADNT) shares fell Wednesday after the company reported mixed financial results for its fourth quarter.

The company posted adjusted earnings of 52 cents per share for the quarter, from 68 cents a year ago, missing analysts' estimates of 53 cents.

The quarterly net sales rose to $3.69 billion from $3.56 billion a year ago, topping expectations of $3.58 billion.

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The company reported an adjusted EBITDA margin of 6.1%, down from 6.6% the previous year.

In fiscal 2025, Adient strengthened its market position with key new and replacement contracts, including JIT and foam business for the F-150 and trim and SUV program wins with an Asia-based OEM.

In China, partnerships with local automakers drove growth, with China OEMs contributing nearly 70% of the $1.4 billion in new business booked in Asia.

Adient met its fiscal 2025 commitments despite ongoing industry and macroeconomic challenges. The company said it delivered a solid business performance, effectively offsetting the impacts of tariffs and lower customer production.

For the year, adjusted EBITDA reached $881 million, representing a 6.1% margin, up 10 basis points from fiscal 2024, while free cash flow totaled $204 million.

Segment Performance

By region, the Americas delivered $1.79 billion in sales with $111 million in adjusted EBITDA, reflecting a 6.2% margin. Europe, Middle East, and Africa (EMEA) posted $1.15 billion in sales and $31 million in adjusted EBITDA, for a 2.7% margin, while Asia contributed $783 million in sales and $106 million in adjusted EBITDA, yielding a robust 13.5% margin.

Liquidity and Capital Allocation

Adient ended fiscal 2025 with $958 million in cash and total liquidity of $1.8 billion. The company repurchased $50 million of shares in the fourth quarter and $125 million for the full year, about 7% of shares outstanding. About $135 million remains under its current buyback authorization. After quarter end, Adient refinanced its ABL revolver, extending its maturity to 2030.

Outlook

For fiscal 2026, Adient expects sales of about $14.4 billion, capital expenditures of approximately $300 million, and free cash flow of around $90 million.

Adient expects adjusted EBITDA of around $845 million for fiscal 2026, assuming no changes to existing tariff policies, with most tariff-related costs resolved and no significant impact on previously projected volumes from tariffs.

CEO Commentary

Jerome Dorlack, President and Chief Executive Officer, stated, "We closed the fiscal year with strong momentum, thanks to our resilient operating model and unwavering commitment to execution. Our team's focus and agility enabled us to consistently deliver on our objectives and successfully navigate macro volatility, win significant new business and position the company for sustainable growth in the future."

Price Action: ADNT shares were trading lower by 12.30% to $21.04 at last check Wednesday.

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