American Axle’s debt and equity edged up after the auto supplier reported 3Q21 EBITDA at the high end of expectations and exceeded revenue estimates. The gains came even after the company lowered earnings guidance for 2021. 

For the quarter ended 30 September, the issuer reported USD 183.2m of adjusted EBITDA, which while 38% lower versus the USD 297.1m booked year-over-year, came in at the high end of investor expectations that called for USD 175m–USD 185m. On the revenue front, the company booked USD 1.21bn of revenue, compared to investor expectations of USD 1.18bn, added a buysider and two sellsiders.

American Axle noted however that it experienced a USD 83m sales disruption during the quarter and revised full-year revenue guidance to USD 5.15bn–USD 5.25bn, compared to previous expectations of USD 5.3bn–USD 5.5bn. Adjusted EBITDA is now projected to come in at USD 830m–USD 850m, compared to the prior outlook of USD 875m–USD 925m. 

The lowered forecast brings 2021 free cash flow estimates to USD 350m–USD 400m after accounting for USD 215m–USD 245m of capex, USD 185m of interest expense and USD 50m of taxes.

Looking ahead, major headwinds from the semiconductor shortage are expected to resolve by the end of 2022, resulting in higher expected adjusted EBITDA and free cash flow for 2022, as reported. For 2022, the outlook for free cash flow is USD 440m through USD 955m of adjusted EBITDA, USD 280m of capex, USD 185m of interest expense and USD 50m of taxes.

As of 30 September, the automobile component manufacturer’s liquidity totaled USD 1.5bn through USD 500.7m of cash and roughly USD 1bn of revolver availability. 

American Axle’s USD 600m 5% senior unsecured notes due 2029 traded at 97 to yield 5.47% today, up from 95.75 to yield 5.672% on 4 November, according to MarketAxess. 

The equity popped 3.2% intraday to trade at USD 9.87 per share for a USD 1.16bn market cap. 

2021 Debtwire