Shares of vehicle seat system manufacturer Adient (NYSE:ADNT) fell as much as 17.5% on Monday, following a press release from the company detailing the resignation of its CEO and a lowered outlook for fiscal 2018 profitability.
"While our market position remains strong and our China joint ventures continue to perform at high levels, we recognize that we are not executing at the levels we are capable of in our consolidated Seat Structures and Mechanisms and Seating segments," said Adient's new interim CEO Frederick Henderson, "and that shortfall has been reflected in our financial results and valuation."
As of 12:27 p.m. EDT, the stock was down 16.7%.
Last month, Adient forecast adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for fiscal 2018 to be between $1.4 billion and $1.45 billion. Now management is expecting adjusted EBITDA of just $1.25 billion. This lowered forecast for profitability comes as Adient is increasing its guidance for full-year revenue; management now expects full-year revenue of about $17.5 billion, up from a previous forecast for fiscal 2018 revenue between $17 billion and $17.2 billion.
In conjunction with Adient's revised outlook, the company said Bruce McDonald is stepping down from both his CEO and chairman position to retire, though he will remain as an advisor through September.
Aiming to address the company's worse-than-expected performance recently, Henderson said his "immediate focus is on better operational execution to drive meaningful improvements in profitability and free cash flow."
In the coming quarters, investors should look for Adient to start building a track record of meeting or exceeding its revenue and adjusted EBITDA targets.