DETROIT — American Axle and Manufacturing Holdings said earnings and revenue slipped during the first quarter as it grappled with the COVID-19 crisis, but the company said operating results remained strong under the circumstances.
Shares in American Axle surged on the news, rising 37 percent to $5.85 in midday trading.
Adjusted earnings, after interest, taxes and other onetime deductions, fell 13 percent to $213 million during the quarter. The company said COVID-19 costs took a $47 million bite out of those EBITDA results.
On a call Friday, CFO Chris May credited the positive adjusted EBITDA performance to high productivity and low launch costs.
In the statement, the company reported first-quarter net sales dropped 22 percent to $1.34 billion.
The company previously targeted sales of $5.8 billion to $6 billion in 2020, lower than in previous years.
American Axle joins other suppliers — including Aptiv, BorgWarner, Magna, Lear Corp. and Tenneco — in reporting earnings this week amid the ongoing pandemic.
The company reported a first-quarter net loss of $501.3 million, compared with a net gain of $41.6 million in the same period last year. American Axle also reported a pretax goodwill impairment of $510 million.
Adjusted free cash flow during the quarter fell 56 percent to $83.3 million.
The supplier’s core driveline sales declined 12 percent to $1.03 billion, while sales in its metal-forming business dropped 13 percent to $422.3 million.
CEO David Dauch said the company had strong operating performance and free cash flow in the first quarter.
“We expect this unprecedented health crisis and related effect on global light-vehicle production and consumer demand to further impact AAM’s financial results in the second quarter of 2020,” he said.
American Axle has been relatively quiet about the impact of the coronavirus on its operations since releasing a business update March 25, when Dauch said flexing the company’s variable cost structure and managing its controllable expenses were critical to surviving the downturn.
The supplier said Friday it has amended its existing credit facility and adjusted business operations for the impact of COVID-19.
“We are confident that our solid liquidity level will support our working capital and business needs as we manage through this extraordinary situation and best position AAM for the future,” Dauch said.
American Axle, of Detroit, ranks No. 40 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $7.27 billion in 2018.