American Axle & Manufacturing Holdings Inc. (AAM) has reported its financial results for the second quarter of 2016 and updated its full year 2016 outlook.
AAM’s net income in the second quarter of 2016 was $71 million, or 90 cents per share, as compared to net income of $58.6 million, or 75 cents per share, in the second quarter of 2015. In the second quarter of 2016, AAM’s results reflect the impact of a $1 million investment gain related to the final distribution of the Reserve Yield Plus Fund.
AAM’s net income in the first half of 2016 increased to $132.1 million, or $1.68 per share, as compared to net income of $111.8 million, or $1.43 per share, in the first half of 2015.
“AAM’s second quarter results were highlighted by record quarterly sales and gross profit. As a result of our strong operational and financial performance in the first half of 2016, we are increasing our full year profitability and free cash flow targets for 2016,” said AAM’s Chairman and CEO David Dauch. “AAM continues to earn new business featuring our latest innovative driveline solutions and expects customer demand for our advanced technologies to fuel greater business diversification and profitable growth.”
AAM’s sales in the second quarter of 2016 increased to $1.025 billion as compared to $1.004 billion in the second quarter of 2015. Non-GM sales were $333.9 million in the second quarter of 2016 as compared to $343.1 million in the second quarter of 2015.
AAM’s net sales in the first half of 2016 were $1.995 billion as compared to $1.973 billion in the first half of 2015. Non-GM sales in the first half of 2016 were $657.1 million as compared to $672 million in the first half of 2015.
AAM’s gross profit in the second quarter of 2016 increased to $191.4 million, or 18.7 percent of sales, as compared to $164.5 million, or 16.4 percent of sales, in the second quarter of 2015.
AAM’s gross profit for the first half of 2016 was $365.4 million as compared to $317.3 million in the first half of 2015.
Share Repurchase Program
AAM began its share repurchase program in the second quarter of 2016, in which the company repurchased 100,000 shares at an average price of $15.02. As of June 30, 2016, there was approximately $98.5 million remaining for future repurchases under the program, which expires on Dec. 31, 2018.
AAM’s Full Year 2016 Outlook
AAM has updated its full year 2016 outlook as follows:
- AAM is targeting sales of $4 billion in 2016. This sales projection is based on the anticipated launch schedule of programs in AAM’s new and incremental business backlog and the assumption that the U.S. Seasonally Adjusted Annual Rate of Sales is approximately 17.5 million light vehicle units in 2016.
- AAM is targeting an Adjusted EBITDA margin in the range of 15 to 15.5 percent in 2016.
- AAM is targeting free cash flow in the range of $140 million to $160 million in 2016.
- AAM is targeting full-year capital spending of approximately 6 percent of sales in 2016.
