DETROIT — American Axle and Manufacturing Holdings said Friday the coronavirus pandemic cost the supplier about $87 million in the third quarter.
Sales for the third quarter slipped 16 percent to $1.41 billion, as repercussions from the pandemic continued to impact some parts of the global supply chain.
Still, net income for the third quarter was $117.2 million compared with a net loss in the same quarter last year of $124.2 million. The net loss last year included the impact of a $225 million pretax impairment charge. The UAW strike at General Motors also impacted the supplier last year.
American Axle joined several other suppliers this week that reported third-quarter earnings as the coronavirus crisis lingers — with some suppliers experiencing rebounds and higher-than-expected results compared with earlier this year. More companies are set to report earnings in the coming weeks.
American Axle also reported that third-quarter adjusted earnings, after interest, taxes and other onetime deductions, grew nearly 12 percent to $297.1 million.
The company reported that adjusted free cash flow during the third quarter surged 35 percent to $217.2 million.
Shares of the supplier were unchanged at $6.64 in Friday morning trading on Wall Street.
“AAM’s strong third-quarter operating financial results and free cash flow generation reflect the benefits of recovering global production volumes and our cost saving actions,” CEO David Dauch said in Friday’s statement. “Despite the global challenges we have faced this year, our performance demonstrates AAM’s ability to adjust our business and deliver solid results in a dynamic market environment.”
American Axle withdrew its 2020 financial outlook on March 25. The company updated its full-year guidance Friday and said it anticipates sales of about $4.6 billion. Adjusted free cash flow is expected to be $220 to $235 million.
American Axle originally targeted sales of $5.8 billion to $6 billion in 2020.
Other 2020 challenges
In September, the supplier experienced a fire at its Colfor Manufacturing plant in Malvern, Ohio. The plant fire could have impacted General Motors, which accounted for 37 percent of American Axle’s business last year, according to an SEC filing.
CFO Chris May said in a call with investors that the company recorded $8.6 million in net expenses related to the Malvern fire.
“We continue to assess the extent of the damage caused by the fire and related impacts,” he said.
American Axle said Friday its new full-year targets are “based on current customer schedules and assume that there are no significant impacts to our expected production or costs related to COVID-19 or the recent fire at our Malvern Manufacturing Facility through the remainder of 2020.”
American Axle reported that net sales fell 22 percent to $1.34 billion during the first quarter.
The supplier said revenue for the second quarter dropped nearly 70 percent to $515.3 million from $1.7 billion.
American Axle ranks No. 41 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $6.53 billion in 2019.
