Adient plc

Consolidated revenue was approximately $3.9 billion in Q3, up 5% year over year. Adjusted EBITDA was $225 million, flat year over year, and adjusted EBITDA margin was 5.7% of sales; management said EBITDA would have been in the mid-6% range excluding about $32 million of temporary operating costs tied to the Middle East conflict and customer/supplier disruptions. Adjusted net income was $38 million, or $0.48 per share, flat year over year. Free cash flow was $138 million in the quarter and $161 million year to date. For fiscal 2026, Adient raised revenue guidance to approximately $15 billion, kept adjusted EBITDA guidance at approximately $885 million, and kept free cash flow guidance at approximately $130 million.

Jerome Dorlack emphasized that execution remained strong despite a volatile operating environment, saying the quarter aligned with internal expectations and that the business model is delivering. He pointed to customer awards, new business wins, and launch execution as evidence that Adient remains a supplier of choice. His tone was confident and constructive, with repeated emphasis on self-help actions like automation, restructuring, and operational discipline to position the company for fiscal 2027 and beyond.

Mark Oswald said sales rose 5% year over year to approximately $3.9 billion, driven by favorable FX, strong volumes in the Americas and Asia, and solid commercial discipline. He quantified about $32 million of temporary operating costs in the quarter, including about $20 million from Middle East-related freight, fuel and resin costs and about $12 million from customer-driven inefficiencies; he said some recovery should come with a roughly two-quarter lag for pass-throughs. He also noted $138 million of Q3 free cash flow, $161 million year to date, total liquidity of about $1.8 billion including $924 million of cash and roughly $834 million of revolver capacity, and leverage of 1.7x. On capital returns, he said the company repurchased about 1.3 million shares for $30 million in the quarter and has about $80 million remaining under its authorization.

Analysts focused heavily on the Middle East cost impact, restructuring, China/Asia margin pressure, and the 2027 outlook. Management said Middle East-related costs for the full year should be roughly $35 million to $40 million, that Q4 should see some normalization, and that restructuring for fiscal 2026 remains in the roughly $120 million range. On Europe, management said the roll-off of underperforming metals business is a major 2027 variable, estimating about $90 million of revenue roll-off next year, with more to come in 2028. On China, they said Adient is under-indexed to export exposure, expects around 100 basis points of margin compression in China this year, and still sees the region as profitable and cash-generative.