Automotive Technology Supplier Aptiv's Mixed Bag: Q4 Sales Miss Mark But Profits Rise

Zinger Key Points
  • Adjusted for currency exchange, commodity movements and acquisitions, revenue increased by 2%.
  • Aptiv expects commercial momentum to continue to accelerate in 2024.

Aptiv PLC APTV reported fourth-quarter fiscal 2023 net sales growth of 6% year-over-year, $4.92 billion, missing the consensus of $5.07 billion.

Adjusted for currency exchange, commodity movements and acquisitions, revenue increased by 2% in the fourth quarter.

The company’s adjusted operating income increased 14.7% Y/Y to $600 million, and the margin expanded by 93 bps YoY to 12.2%.

Adjusted EBITDA was $772 million (+14.5% Y/Y), and the margin was 15.7%, up 117 bps. Adjusted EPS of $1.40 beat the consensus of $1.33.

Aptiv generated net cash flow from operating activities for the quarter of $624 million, lower than $933 million in the prior year period.

The company exited the quarter with $1.6 billion in cash and equivalents, with a total available liquidity of $4.1 billion.

During the quarter, Aptiv repurchased 3.8 million shares for ~$300 million, leaving ~$1.6 billion available for future share repurchases.

2024 Outlook: Aptiv sees net sales of $21.3 billion-$21.9 billion versus the consensus of $21.68 billion. Adjusted EPS is expected to be $5.55 – $6.05 versus the consensus of $5.82.

The company sees an Adjusted EBITDA margin of 15.0% – 15.3% and Adjusted operating margin of 11.6% – 12.0%, along with cash flow from operations of $2.3 billion.

Price Action: APTV shares are trading lower by 2.72% at $84.36 on the last check Wednesday.

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