Adient (NYSE:ADNT) expects higher adjusted earnings in fiscal 2027 despite declining vehicle production and lower sales, as the automotive seating supplier relies on cost reductions and recoveries from customers to offset pressure from tariffs, commodities and changing vehicle mix.
The company reported fiscal fourth-quarter sales of $3.7 billion, up 1% from a year earlier, and adjusted earnings before interest, taxes, depreciation and amortization of $229 million, up $3 million. Adjusted net income was $40 million, or $0.52 per share.
For the full year, revenue rose 4% to approximately $15.2 billion, while adjusted EBITDA was essentially flat at $884 million. Adient generated $222 million in free cash flow and ended the year with $886 million in cash.
2027 outlook calls for margin expansion
Incoming Chief Financial Officer Peter Carlin said Adient expects fiscal 2027 revenue of $14.8 billion to $15 billion and adjusted EBITDA of $900 million to $925 million. The forecast assumes lower production volumes across major regions, partially offset by growth above the market in Asia.
Carlin said S&P Global Mobility anticipates global vehicle production will decline approximately 1%, with all key markets down year over year. Adient also expects vehicle and program mix to weigh on results in the Americas and China.
Despite those pressures, the company expects modest margin expansion through productivity improvements, commercial actions and restructuring. Carlin said the company will need more business performance improvements than it achieved in fiscal 2026, but declined to quantify the individual contributions.
“We have a lot of business performance ahead of us, but our teams are already mapped out a large part of it and continue to work every day to recover it,” Carlin said.
Chief Executive Officer Jerome Dorlack said recent Canadian tariff changes created a $30 million to $70 million cost burden in the Americas, and Adient’s ability to recover those costs is included in its guidance. He also cited higher fuel costs, customer downtime and labor costs following revised United Auto Workers agreements at two large plants.
Cash flow and repurchases
Adient forecasts more than $100 million in free cash flow for fiscal 2027, below its fiscal 2026 result. Carlin said capital spending and restructuring costs will remain elevated as the company launches programs, invests in automation and works to lower costs.
The prior year benefited from approximately $60 million in timing-related working capital items, including about $35 million in IEEPA refunds that Adient expects to return to customers in fiscal 2027 and approximately $25 million in customer tooling payments pulled forward from 2027. Carlin also cited a $35 million year-over-year dividend timing headwind in the new fiscal year.
Dorlack encouraged investors to consider cash generation over both years, saying the company now expects approximately $320 million in combined free cash flow, compared with an earlier expectation of roughly $280 million to $290 million.
Adient repurchased $100 million of shares in fiscal 2026, equivalent to approximately 4.9 million shares. Its board recently increased the share repurchase authorization by $400 million, and management plans approximately $100 million in repurchases in fiscal 2027, subject to cash generation, market conditions and other capital needs.
The board also approved a tax benefits preservation plan intended to reduce the risk that an ownership change could limit the company’s use of U.S. net operating loss carryforwards and other tax attributes. Dorlack said management monitors changes in share ownership and considered the plan prudent given the value of those assets.
Regional pressures and new business
In China, Dorlack expects Adient to continue growing faster than the market, though not at the same rate as in fiscal 2026. He said some of the margin compression the company had previously anticipated would emerge in fiscal 2027.
After the quarter ended, Adient agreed to sell its 50% stake in the FAA seat frame joint venture with CFAA, subject to closing conditions. Dorlack said the transaction would simplify ownership and improve coordination between the frame and seating businesses.
Europe remains Adient’s most challenging operating region, Dorlack said, citing changing customer programs and delayed launches. He said the company is evaluating restructuring spending and potential sales of non-core assets, and that the European seating industry has excess capacity.
Among new business awards, Adient secured an onshoring program with Nissan for an e-POWER vehicle. The company expects the program to begin in the second half of fiscal 2028 at approximately 40,000 units annually. Dorlack said Adient’s backlog of onshoring wins now exceeds $400 million, although delays on some projects will pressure the Americas’ mix in fiscal 2027.
Carlin is scheduled to become CFO on November 16, succeeding Mark Oswald. Dorlack thanked Oswald for his contributions and said Carlin, who previously served on Adient’s board, brings a new perspective to the role.
About Adient (NYSE:ADNT)
Adient plc (NYSE: ADNT) is a global automotive supplier specializing in the design, development and manufacture of vehicle seating systems. The company supplies complete seating assemblies as well as components such as seat structures, mechanisms, foam, fabrics, leather and other trim materials.
Adient works with automakers and other automotive customers to provide seating solutions for passenger cars, trucks, sport utility vehicles and commercial vehicles. Its offerings are designed to support vehicle comfort, safety, styling, weight reduction and manufacturing efficiency, with products developed for both traditional and electrified vehicles.
The company was formed in 2016 through the separation of Johnson Controls’ automotive seating business.
