Shares of Adient (NYSE:ADNT) fell 12% on Thursday afternoon after the autoparts manufacturer released quarterly results that came in below expectations. The COVID-19 pandemic is weighing on the entire automotive sector, and the pressure is unlikely to abate any time soon.
Before markets opened on Thursday, Adient reported a third-quarter adjusted loss of $2.78 per share, worse than the consensus estimate for a loss of $2.08 per share. Revenue came in at $1.63 billion, $20 million ahead of expectations but down 61.4% year-over-year.
On a post-earnings call with investors, the automotive seating specialist said COVID-19 was taking a toll, both on demand and via added expenses necessary to keep employees safe. Prior to the pandemic, Adient was a company in the middle of a turnaround, and had been showing signs its plan was having the desired effect.
Adient, which was spun out of Johnson Controls International in 2016, has been working to trim its cost footprint in order to boost profitability. But the company this year has been plagued by production stops and starts in the Americas and overseas that have brought down earnings and caused temporary working capital headwinds.
The company said that the pandemic caused a negative $400 million impact on adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the quarter.
All of Adient's global plants are running again, and the company said it expects to generate between $3.3 billion and $3.5 billion in revenue in the fiscal fourth quarter. Analysts are currently on the low side of that estimate, expecting $3.31 billion in sales.
The company's seats are part of a number of high-profile upcoming automotive launches, including Ford Motor's Mustang Mach-E and F150, but the entire industry right now is on watch due to fears of a prolonged recession.
Until the macro uncertainty clears and we see growth in auto sales, it is going to be difficult for Adient shares to reach the fast lane.