Analyst Note| Richard Hilgert |
Narrow-moat Aptiv reported third-quarter earnings per share before special items of $1.28, $0.30 above the $0.98 FactSet consensus estimate and $0.79 higher than the $0.49 year-ago result as customer production shutdowns from the chip crunch alleviated. Third-quarter revenue also beat consensus by 7%, jumping 26% to $4.61 billion from $3.65 billion last year. Excluding unfavorable currency, organic revenue climbed 33%, exceeding a 24% increase in global light-vehicle production, weighted to Aptiv’s customer base, by 9 percentage points due to higher volume, the launch of new business, and customer cost recoveries. Despite continued headwinds from the chip shortage, China COVID-19 lockdowns, the Ukraine crisis, higher raw material costs, and other inflationary cost pressures, third-quarter adjusted EBITDA was $673 million for a margin of 14.6%, up 63% from $412 million with an 11.3% margin in the prior year.