American Axle & Manufacturing Holdings Inc. on Friday joined many of its auto supplier peers in outperforming expectations during the fourth quarter but falling well short for the year.
In a separate announcement, American Axle said it secured the next generation axle and driveshaft program for Ram’s heavy-duty trucks.
The Detroit-based supplier said it swung to fourth-quarter net income of $36 million, a substantial increase over a loss of $454 million during the Q4 in 2019. The 2019 net loss was attributed to a pretax goodwill impairment of $440 million and a $52 million impact from the UAW strike at American Axle's largest customer, General Motors.
American Axle revenues topped $1.44 billion in the quarter, compared with $1.43 billion in the same quarter in 2019. The 2020 fourth quarter took a $40 million hit from COVID-19 protocols and shutdowns while the 2019 fourth quarter included $186 million in lost revenue tied to work stoppages at GM, the supplier said in a statement.
But COVID-19's impact on previous quarters smashed its year-end earnings. American Axle reported a $561.3 million net loss in 2020, a widened gap over a $484.5 million loss in 2019. The company took one-time impairment charges of $510 million in 2020 and $665 million in 2019.
Full-year sales plummeted nearly 28 percent to $4.71 billion from $6.53 billion in 2019. The sales total for 2019 included $628 million in sales tied to the company's U.S. iron casting operations, which it sold to private equity firm Gamut Capital Management in a $245 million deal in 2019.
The supplier said issues related to COVID-19 cost another $1.24 billion in sales in 2020 and GM work stoppages cost the top line $243 million in 2019.
"AAM delivered solid financial results and free cash flow performance in 2020 as we successfully managed our cost structure while benefiting from the production recovery during the second half of this year," CEO David Dauch said in the statement. "While last year was certainly challenging, we look forward to a better and brighter year in 2021 ..."
American Axle forecasts full-year revenue in 2021 in the range of $5.3 billion to $5.5 billion.
The company said it will be Ram’s "strategic driveline supplier" through 2030.
"AAM expects current and future sales related to this program to exceed several billion dollars over the lifetime of this award," the company statement said.
“AAM is pleased to continue our long-term partnership with Ram as the supplier of axles and driveshafts for the 2500 and 3500 Heavy Duty pick-up trucks," Dauch said in the separate statement. "We look forward to providing our latest and most efficient driveline technologies as Ram’s strategic supplier for the next-generation of this key vehicle program."
Shares of American Axle closed Friday's trading down 7 percent to $9.82 but remain up almost 25 percent year-to-date.
American Axle ranks No. 41 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $6.5 billion in 2019.
Philip Nussel of Automotive News contributed to this report.