American Axle & Manufact. Holdings, Inc. (NYSE: AXL) stock surged 14.41% on Feb 15^th, 2019 (Source: Google finance) after the company posted better than expected results for the fourth quarter of FY 18. AAM’s adjusted EBITDA in the fourth quarter of 2018 was $244 million, or 14.4% of sales. This compared to $295.7 million in the fourth quarter of 2017, or 17.1% of sales. AXL has the company recorded non-cash goodwill impairment of $485.5 million in the fourth quarter of 2018 related to the casting and powertrain business units. AXL ‘s continues to deliver strong free cash flow generation in 2018. AXL ‘s adjusted free cash flow in the fourth quarter of 2018 was $142.4 million. For the full year, 2018 AXL ‘s adjusted free cash flow was $322.3 million compared to $341 million for the full year 2017. The net debt leverage ratio at the end of 2018 was 2.8x and the company continues to make pre-payments on the gross debt with a $100 million payment in the fourth quarter of 2018.

AXL in the fourth quarter of FY 18 has reported the adjusted earnings per share of 45 cents, while adjusted revenue growth of 35.9 percent to $1.69 billion in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $1.68 billion. The driveline business unit recorded sales of $996 million in the fourth quarter of 2018 and delivered a $146.5 million of segment adjusted EBITDA. Sales in this business unit were down versus the third quarter due to lower production base as a result of normal seasonality, as well as addition downtime due to customer program changeovers. The Metal Forming business unit recorded sales of $339 million and segment adjusted EBITDA of $54.6 million in the fourth quarter of 2018. Despite lower sales due to seasonality and program changeover, this business unit performed at over 16% EBITDA margin level for the quarter. And the Casting business unit recorded sales of $218.5 million and segment adjusted EBITDA of $10.6 million. The company continue to be impacted by labor and operational efficiencies and input cost inflation in this business unit. As part of the improvement initiatives, the company have been able to negotiate some price increases of the commercial industrial customers.