Aptiv (APTV) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 operating earnings and EPS, with 180 basis points of operating margin expansion and 26% EPS growth year-over-year, despite a 2–3% revenue decline due to lower production at select customers and growth with Chinese local OEMs.

• Net income for Q2 2024 was $943M, up from $246M in Q2 2023, primarily due to a $641M gain from Motional joint venture restructuring, which reduced equity interest from 50% to 15% and eliminated future funding requirements.

• Announced a new $5B share repurchase authorization, including a $3B accelerated share repurchase program, representing over 25% of current market cap.

• Strong cash flow supported $434M in Q2 share repurchases and a new $5B authorization, with a $3B accelerated program funded by cash and new/existing debt.

• 2024 outlook reflects lower global vehicle production but increased EPS guidance, with continued focus on electrification, connectivity, and digitization trends.

Financial highlights

• Q2 2024 revenue was $5.1B, down 2–3% year-over-year; year-to-date revenue was $10.0B, down 1% year-over-year.

• Adjusted EBITDA reached $788M (15.6% margin), and adjusted operating income was $606M (12.0% margin), both up year-over-year.

• Q2 GAAP net income was $938M (18.6% margin), or $3.47 per diluted share; adjusted EPS was $1.58, up 26% year-over-year.

• Operating cash flow was $643M in Q2, up 20% year-over-year; year-to-date $887M, up 69%.

• Gross margin improved to 19.2% in Q2 2024 from 16.6% in Q2 2023, driven by operational performance and lower material costs.

Outlook and guidance

• Full-year 2024 net sales expected at $20.1B–$20.4B, with ~1% adjusted growth and 4% above market.

• Adjusted operating income guidance: $2.38B–$2.48B (11.8%–12.1% margin); adjusted EBITDA $3.11B–$3.21B (15.4%–15.7% margin).

• Adjusted EPS guidance: $6.15–$6.45, including ~$0.50 per share in anticipated Motional equity losses; GAAP EPS: $7.00–$7.30.

• Operating cash flow expected at $2.15B, up 13% year-over-year; capital expenditures projected at $900M.

• Global vehicle production now expected to be down 3% in 2024, with North America down 1%, Europe down 5%, and China flat.