Aptiv PLC Stock Takes Off After Q1 Financial Performance, Restructuring Deal

Zinger Key Points
  • Aptiv's Q1 earnings beat expectations with $1.16 adjusted EPS, showcasing 200 basis points margin expansion year-over-year.
  • CEO Kevin Clark announces nearly $13B in new business awards, emphasizing growth prospects despite regional challenges.

Aptiv PLC APTV reported first-quarter financial results Thursday before the bell, following which the shares started soaring. Here’s a look at the key metrics from the quarter.

Q1 Earnings Detail: Aptiv reported first-quarter adjusted earnings per share of $1.16, beating the street expectation of $1.01. The company reported quarterly revenues of $4.901 billion, missing the analyst consensus of $5.008 billion.

Adjusted for currency exchange and commodity movements, revenue increased by 2% in the first quarter, reflecting growth of 7% in Asia, which includes 9% in China and 2% in North America, partially offset by declines of 1% in Europe and 9% in South America.

“Aptiv delivered solid results in the first quarter with 200 basis points of margin expansion year-over-year and a return to growth above market, despite a slowdown in electrification in North America and Europe and persistent labor and material cost headwinds,” said Kevin Clark, chairman and chief executive officer. 

Adjusted operating income margin was 11.1%, compared to 9.1% in the prior year period, primarily reflecting improved operating performance, including the benefits of cost reduction initiatives, and increased volumes. Depreciation and amortization expenses totaled $230 million, an increase from $216 million in the prior year period.

“We secured significant new business awards totaling nearly $13 billion, including our first full system Gen 6 ADAS award and first power electronics win for the global market,” Clark added.

Restructuring Transactions: In April 2024, Aptiv and Hyundai Motor HYMLY entered into an agreement to restructure Aptiv’s ownership interest in Motional.

These transactions are anticipated to result in the reduction of Aptiv’s common equity interest from 50% as of March 31 to approximately 15%.

Outlook: Aptiv raised FY24 adjusted earnings per share outlook in the range of $5.80 – $6.30 versus the street estimate of $5.75 (prior view: $5.55 – $6.05).

The company lowered its FY24 revenue outlook to $20.850 billion- $21.450 billion, versus the street view of $21.570 billion (prior view: $21.30 billion- $21.90 billion).

Price Action: APTV shares are trading higher by 11.6% to $77.87 at last check Thursday.

Now Read: Will Apple Crack AI Code And Spark Investor Optimism? Tim Cook’s Tech Strategy In Focus Amid Expected Q2 Slump

Photo: Shutterstock

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