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Aptiv PLC APTV

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Morningstar’s Analysis

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Aptiv Sees Chip Crunch Hit to Q3 Results, Maintains Adjusted Guidance; Slight FVE Increase to $106

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

Narrow-moat rated Aptiv reported third-quarter earnings per share before special items (EPS) of $0.38, a penny better than the $0.37 FactSet consensus estimate but $0.75 below the $1.18 loss a year ago on unpredictable customer production shutdowns from the chip crunch. Turning production on and off again like a light switch drives auto part suppliers dramatically up the short-term cost curve. Third-quarter revenue topped the FactSet consensus by 159 million or 5%, declining less than 1% to $3.65 billion from $3.67 billion last year. Excluding favorable currency, commodities, and divestitures, organic revenue dipped by 5%, exceeding a 23% plunge in global light vehicle production weighted to Aptiv’s customer base by 18 percentage points. Adjusted EBITDA was $412 million for a margin of 11.3%, $18 million shy of the $430 FactSet consensus, due to higher-than-expected costs relating to supply chain disruption from the global microchip shortage and higher raw material costs.

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Company Profile

Business Description

Aptiv’s signal and power solutions segment supplies components and systems that make up a vehicle’s electrical system backbone, including wiring assemblies and harnesses, connectors, electrical centers, and hybrid electrical systems. The advanced safety and user experience segment provides body controls, infotainment and connectivity systems, passive and active safety electronics, advanced driver-assist technologies, and displays, as well as the development of software for these systems. Aptiv's largest customer is General Motors at roughly 13% of revenue, including sales to GM’s Shanghai joint venture. North America and Europe represented approximately 38% and 33% of total 2019 revenue, respectively.

Contact
5 Hanover Quay, Grand Canal Dock
Dublin, D02 VY79, Ireland
T +353 12597013
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 151,000

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