Automotive seating suppier Adient increased sales and earnings durings its fiscal fourth quarter despite headwinds that cost the automotive supplier $2.2 billion in revenue for the year.
The seating and interiors supplier said quarterly sales surged 32 percent from last year and it more than doubled its earnings, according to its earnings report Friday.
The Plymouth, Mich.-based company, which is domiciled in Ireland, reported adjusted earnings of $227 million on $3.7 billion of revenue in the fourth quarter.
Full year revenue was up 3 percent from last year to $14.1 billion, while gross profit slipped 2 percent to $807 million.
Adient shares rose 14.2 percent to close at $37.96 on Friday.
"Our business is performing extremely well right now," CEO Doug Del Grosso said on a call with investors. "We've addressed a lot of the issues that plagued the business not that long ago. This business is about execution every single day so we have to continue to perform the way we've been performing."
Adient, which has struggled with operations in the past, said Friday that it has approved a $600 million share repurchase program made possible by its "strong operational performance, transformed balance sheet and confidence in achieving its long-term plan."
As with other automotive companies, supply chain headwinds, including inflation and car production volatility, continue to hurt Adient's balance sheet, its executives said. Those factors accounted for a $2.2 billion revenue loss and $600 million EBITDA loss for the year.
CFO Jeff Stafeil, who is leaving Adient for a job at Tenneco Inc. at the end of the month, said Adient expects to recover two-third of its losses through improved production next year.
"The temporary operating inefficiencies, we've already started to see some improvements there as the supply chains have become a little better," he said. "I would say certainly not to full level, but we've seen a little bit of green shoots in there, and we would expect that to continue to improve."
The company said it made nearly $1 billion of debt paydown in the year and expects increased earnings, margin and free cash flow in fiscal year 2023.
Meanwhile, negotiations with customers on contracts and cost pass-throughs remain ongoing, Stafeil said.
"If we're going to have that type of inflation in our type of business model, some of that is going to have to be covered by the customer," he said. "We've had great progress on that …"
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