Aptiv bounces back in Q4

DETROIT — Aptiv said net income grew 23 percent to $283 million in the fourth quarter, a positive sign for the supplier after a challenging year hit by the COVID-19 pandemic.

The autonomous-driving technologies and driver-assist systems supplier said on Wednesday that its fourth quarter generally bounced back despite the impact of the pandemic, but full-year results were lower. This includes volume declines of 7 percent.

Aptiv joined several suppliers this week reporting fourth-quarter and full-year earnings as the coronavirus crisis lingers around the globe. More companies are set to report results over the next few weeks.

Revenue grew 17 percent to $4.2 billion in the fourth quarter, but decreased 9 percent to $13.1 billion for the full year as a result of the crisis.

Aptiv's adjusted operating income in the fourth quarter grew nearly 23 percent to $476 million.

Also in the quarter, by region, Aptiv's revenue grew 20 percent in Europe, 11 percent in North America and 10 percent in Asia, which includes 9 percent growth in China. Revenue jumped 37 percent in South America.

By segment, advanced-safety and user-experience revenue increased 7 percent to $1.12 billion in the quarter, while signal and power solutions revenue grew 21 percent to $3.1 billion.

Aptiv also said it saw a 14 percent increase in cash flow to $799 million in cash from operations during the quarter.

CFO Joe Massaro told investors in a call Wednesday that the company's fourth-quarter results included $70 million of COVID-19-related and supply chain inefficiencies costs.

Aptiv withdrew its full-year guidance last year but later updated it. Net sales were expected to be $12.5 billion to $12.7 billion, and full-year sales were expected to be $14.5 billion to $14.9 billion.

For all of 2020, adjusted operating income dropped 44 percent to $867 billion. Revenue declined 17 percent in North America, 7 percent in Europe and 3 percent in South America, but grew 1 percent in Asia, including 3 percent in China.

The company said that "declines in global vehicle production and consumer demand, work stoppages, disruptions to our supply chain and other adverse global economic impacts, particularly those resulting from temporary governmental 'lockdown' orders for all nonessential activities," primarily affected it in the first half of 2020.

"Last year was a year like no other. Despite the industry declines caused by the COVID-19 pandemic, Aptiv delivered strong performance, validating the strength of our portfolio of market-relevant technologies aligned to the safe, green and connected megatrends," CEO Kevin Clark said in a statement. "In 2021, even as the industry braces for continued pandemic-related challenges, our relentless focus on execution positions Aptiv for continued outperformance."

Shares of Aptiv on Wednesday rose 0.6 percent to $142.14 in early trading.

The company forecast full-year sales of $15.1 billion to $15.7 billion. The company also said it expects full-year adjusted operating income of $1.5 billion to $1.7 billion.

Massaro said Aptiv anticipates $100 million in COVID-19-related operating costs and $80 million in costs related to new supply chain inefficiencies this year.

Aptiv ranks No. 18 on the Automotive News list of the top 100 global suppliers, with estimated worldwide parts sales to automakers of $12.8 billion in 2019.