American Axle & Manufacturing Holdings Inc. on Monday reported a 2014 profit of $143 million, or $1.85 per share, up 51.3 percent from $94.5 million in 2013.
For the fourth quarter, the Detroit-based auto supplier reported a $13.2 million profit, or 17 cents per share, down from $29.8 million, or 39 cents per share, compared to 2013.
The fourth quarter decline was due to a non-cash charge of $35.5 million related to a previously announced pension buyout plan to former American Axle employees. About 3,335 of 6,000 employees accepted the buyouts, according to American Axle Chief Financial Officer Michael K. Simonte. He said those results were in line with the company’s expectations.
Without the charge, American Axle's earnings before interest, taxes, depreciation and amortization (EDITDA) was $512 million, including $135.1 million in the fourth quarter.
Fourth quarter earnings, adjusted for non-recurring costs such as the pension buyout, were 63 cents per share — beating Wall Street expectations of about 54 cents per share.
“2014 was a very successful year for AAM, characterized by strong year-over-over sales growth that continues to outpace the industry, improved profitability and a positive inflection in cash flow generation,” said American Axle Chairman, President and Chief Executive Officer David C. Dauch during a call on Monday with financial analysts and news media.
The company reports revenue was $3.7 billion in 2014 — in line with average expected revenue from analysts of $3.68 billion.
Overall sales in 2014 increased 15.2 percent to $3.7 billion, up from $3.21 billion in 2013. Non-General Motors Co. sales grew 29.5 percent on a year-over-year basis to $1.2 billion in 2014 as compared to $926.7 million in 2013.
For the fourth quarter, sales increased 13 percent to $939.5 million as compared to $831.3 million in the fourth quarter of 2013. Non-GM sales grew 13.2 percent on a year-over-year basis to $317.2 million in the fourth quarter of 2014 as compared to $280.1 million in the fourth quarter of 2013.
In 2015, American Axle is targeting growth across the board, with full year sales of approximately $4 billion to $4.1 billion in 2015; EBITDA in the range of $550 million to $575 million; and free cash flow in the range of $175 million to $200 million. “We feel very good about what we accomplished in 2014,” Simonte said during a phone interview Monday with The Detroit News. “We feel very well positioned heading into 2015.”
Major program launches for American Axle this year include front and rear axles for a new Jaguar Land Rover platform; its first major driveline program for Ford Motor Co. to support a global rear-wheel-drive SUV; front axle for the Nissan Titan; and other parts for programs in China for Fiat Chrysler Automobiles and Mercedes-Benz.
The company expects to increase its non-GM business to at least 40 percent of sales by 2017. It was at 36 percent in 2014.
Bank of America Merrill Lynch research analyst John Murphy, in a note to investors Monday, said the company’s 2015 expectations are “encouraging, and expect earnings growth and potential multiple expansion to drive the stock higher.”
American Axle shares, traded as AXL on the NYSE, closed Monday at $25.03, down 2.11 percent or 54 cents a share.