American Axle swings to modest Q4 profit despite headwinds

DETROIT — American Axle and Manufacturing Holdings Inc., despite difficult business headwinds for U.S. auto suppliers, returned to profitability in the fourth quarter.

Net income swung to $13.9 million from a loss of $46.3 million during the same quarter of 2021, the company said Friday. The year-earlier results were impacted by a one-time $42.3 million pension settlement charge.

“It was simply a challenging year and was negatively impacted by supply chain disruptions,” CEO David Dauch said on a call with investors. “Additionally, we navigated higher input costs throughout the year, including rising utility labor and material costs.”

Revenue rose moderately in the fourth quarter, a reflection of continued difficulty with supply chain volatility, the Detroit supplier said in a statement.

American Axle’s revenue rose 12 percent to $1.39 billion, with full-year revenue rising the same percentage to $5.8 billion. The increases were attributed to the acquisition of Tekfor Group in 2022 and production growth.

American Axle's adjusted free cash flow for the fourth quarter rose 127 percent to $99 million, while its adjusted free cash flow for the full year fell 25 percent to $313 million. The company used its free cash flow throughout the year to “strengthen the balance sheet” by reducing debt, CFO Chris May said.

To manage ongoing challenges, Dauch said the company has been continuing its strategy of securing its “legacy core business” while further investing in electrification.

“We are actively positioning to be the electric propulsion supplier of choice,” May added.

This transition was reflected in the supplier’s new business backlog of $725 million in future annual sales, 40 percent of which is electrification mix, up from 35 percent in the previous backlog.

The company also announced plans to supply Jupiter Electric Mobility its first e-beam axle for the 2.2-ton battery electric light commercial vehicle.

Executives offered a 2023 revenue target range of $5.95 billion to $6.25 billion and an earnings before interest, taxes, depreciation and amortization range of $725 million to $800 million.

Shares in American Axle slipped 8 percent to close at $9.25 on Friday.

American Axle ranks No. 43 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $5.16 billion in 2021.