Investment Thesis
Adient faces fundamental profitability challenges despite significant revenue growth, with negative net income and razor-thin operating margins (1.1%) indicating severe operational inefficiency. The company's weak interest coverage ratio (0.8x) combined with elevated leverage (1.37x D/E) and minimal free cash flow generation (0.4% FCF margin) raises concerns about debt sustainability and financial flexibility.
ADNT Strengths
- Substantial revenue base of $3.6B provides operational scale in automotive supplier market
- Positive operating cash flow of $80M demonstrates ability to generate some cash from operations
- Cash position of $855M provides near-term liquidity buffer for obligations
ADNT Risks
- Negative net margin of -0.6% indicates the company is destroying shareholder value at the bottom line
- Interest coverage ratio of 0.8x signals inability to service debt obligations from operating earnings
- Extremely low free cash flow margin (0.4%) limits deleveraging capacity and reinvestment capability
- Gross margin of only 6% suggests structural pricing power weakness or cost control issues
- Debt-to-equity of 1.37x combined with negative profitability creates financial distress risk
Key Metrics to Watch
- Quarterly trends in gross margin expansion and operating margin improvement
- Interest coverage ratio recovery above 1.25x to ensure debt service viability
- Free cash flow growth rate and cash conversion efficiency
- Debt reduction progress and leverage ratio trending toward <1.0x
ADNT Financial Metrics
ADNT Profitability Ratios
ADNT Balance Sheet & Liquidity
ADNT 5-Year Financial Trend
5-Year Trend Summary: Adient plc's revenue has remained relatively flat over the 5-year period, with a 7% decline. The most recent EPS of $2.15 reflects profitable operations.
ADNT Growth Metrics (YoY)
ADNT Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $3.5B | N/A | $0.00 |
| Q3 2025 | $3.7B | -$11.0M | $-0.12 |
| Q2 2025 | $3.6B | -$50.0M | $-0.55 |
| Q1 2025 | $3.5B | N/A | $0.00 |
| Q3 2024 | $3.7B | -$11.0M | $-0.12 |
| Q2 2024 | $3.8B | -$3.0M | $-0.03 |
| Q1 2024 | $3.7B | $12.0M | $0.13 |
| Q3 2023 | $3.5B | -$30.0M | $-0.32 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ADNT Capital Allocation
ADNT SEC Filings
Access official SEC EDGAR filings for Adient plc (CIK: 0001670541)