DETROIT — American Axle & Manufacturing Holdings Inc. said Friday that it took a hit as a result of the strike at General Motors. Third-quarter sales were down $140 million compared with the year-ago period, with $57 million of it attributable to the strike.
The driveline and drivetrain systems supplier said in a statement that its third-quarter financial results "were unfavorably impacted" by the work stoppage. American Axle is a major supplier to GM, which represented 41 percent of the parts maker's 2018 net sales.
The supplier said it has revised its 2019 financial targets "to reflect the expected impact of the GM work stoppage" on its full-year sales. The supplier said it expects a full-year loss in sales of about $250 million.
The quarterly results nonetheless pleased Wall Street. American Axle shares surged 26 percent to $10.56 in midday trading.
American Axle said its third-quarter net loss was $124.2 million, as compared with net income of $63.8 million in the same period last year.
Much of the net loss was a result of a one-time charge of $225 million for the sale of the supplier's U.S. iron casting business.
The company reported core earnings before restructuring and impairment charges, a figure known as EBITDA, of $265.8 million, down 3.3 percent from last year.
American Axle's net sales were $1.68 billion, down 7.7 percent from $1.82 billion in the same period last year.
The supplier said it saw sales declines in its driveline and metal-forming business units, primarily as a result of the GM strike.
American Axle CEO David Dauch said in a call with investors Friday that while the strike significantly impacted the third quarter, its effects will continue.
"Its impact will be exponentially greater in the fourth quarter of 2019," Dauch said.
The supplier forecasts total 2019 adjusted EBITDA of $950 million to $975 million and sales of around $6.6 billion.
In addition to the strike impact, these targets reflect the impact of lower metal market pass-throughs and assume a full year of financial results from the supplier's U.S. iron casting operations.
American Axle previously forecast a total adjusted EBITDA of $1.05 billion to $1.1 billion and sales of $6.9 billion to $7 billion.
CFO Chris May said lower than expected global production volumes and the impact of the strike have made it a challenging year for American Axle from a top-line perspective.
Despite these challenges, May said American Axle experienced greater operational performance and decreased project and launch costs.
"We have focused on controlling what we can control," May said.
The GM strike impacted several major suppliers in the third quarter, including Tenneco, Aptiv, Lear Corp., Nemak, Adient and Faurecia, among others.
American Axle & Manufacturing, of Detroit, ranks No. 40 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $7.27 billion in 2018.
