NYSE$AXTA

Axalta Coating Systems · Q4 2022 earnings

Q4 2022 earnings · · Investor relations

Briefing

Axalta's Q4 2022 earnings were released, showing growth in net sales and adjusted EBIT.

Axalta Coating Systems reported a strong fourth quarter with earnings at the top of their guidance range, driven by pricing momentum and volume growth, especially in Mobility Coatings. Net sales increased by 8.7% year-over-year, and adjusted EBIT rose by 21.7%.

  • Volumes grew 2.4% year-over-year, with market recovery in Mobility Coatings offsetting softer demand in Industrial.
  • Price-mix increased by 11.7% year-over-year and 3.2% sequentially.
  • Income from operations increased by 15.9% to $109.8 million, while adjusted EBIT rose by 21.7% to $147.2 million.
  • Adjusted diluted EPS increased to $0.38 from $0.30 in Q4 2021.

Headline financials

Total Revenue

$1.24B

Previous: $1.14B+8.8%
EPS (adj)

$0.38

Previous: $0.30+26.7%
Capital Expenditures

$43.4M

Previous: $22.9M+89.5%
Free Cash Flow

$206M

Previous: $249M-17.4%
Net Income

$43.6M

Previous: $53.4M-18.4%
Operating Income

$110M

Previous: $94.7M+15.9%
Gross Profit

$372M

Previous: $333M+11.7%
Cash & Equivalents

$645M

Previous: $841M-23.2%
Total Assets

$7.06B

Previous: $7.22B-2.2%
Stock-Based Comp

$8.2M

Previous: $3.2M+156.3%

Revenue & EPS history

Axalta · Revenue · Quarterly

$1.24B

Q4 2022+8.8%vs Q4 2021
Beat estimate in 6 of 15 quarters(40%)
ActualEstimate

Revenue by segment

Axalta · $1.31B total across 2 segments · Q3 2023

  • Performance Coatings
    $856M
  • Mobility Coatings
    $453M

Forward guidance

Axalta anticipates continued momentum in Refinish, steady quarterly progress in Mobility Coatings, and modest deflation in elevated upstream commodities. They expect meaningful year-over-year growth given carry over pricing, market recovery, and a stabilizing cost environment.

Tailwinds

  • Momentum to continue in Refinish after record 2022 profitability
  • Softer Industrial markets to be balanced by contribution from price-cost normalization and share gains
  • Anticipate steady quarterly progress throughout 2023 vs. Q4 EBIT run-rate in Mobility Coatings
  • Expect modest deflation in elevated upstream commodities
  • Expect meaningful YoY growth given carry over pricing, Refinish and Mobility market recovery, and stabilizing cost environment

Headwinds

  • Anticipate typical seasonal Refinish volume decline to result in lower Performance Coatings EBIT sequentially from Q4 2022 despite improving Industrial contribution
  • Stabilizing raw material environment with pressure anticipated to continue in specialties, labor and energy
  • Expect high-single-digit % YoY raw material headwind in Q1 2023
  • Potentially softer Industrial markets
  • Expect currency headwinds

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q4 2022

Historical avgQ4 2022

+1.2%

Avg return

Earnings day

+0.7%

Avg return

5 days after

+2.7%

Avg return

30 days after

60%

29 / 48 earnings

Positive

+14.1%

Q3 2017

Best reaction

-11.1%

Q2 2017

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+8.8%-3.7%+9.1%
Q4 2025+0.6%-0.2%-18.6%
Q3 2025+2.3%-2.0%+2.4%
Q1 2025-4.7%-1.7%-7.7%
Q4 2024+8.3%+6.0%+0.9%
Q3 2024+7.1%+7.5%+14.3%
Q2 2024-1.2%-4.5%+2.4%
Q1 2024+10.8%+12.8%+13.2%
Q4 2023-3.7%-5.8%+1.8%
Q3 2023+10.6%+11.9%+22.7%
Q2 2023-7.8%-9.5%-11.6%
Q1 2023-5.3%-4.0%-5.0%
Q4 2022+4.5%+7.3%+5.6%
Q3 2022+1.1%+1.2%+13.6%
Q2 2022-5.4%-3.0%-0.2%
Q1 2022+5.5%+2.0%+4.0%
Q4 2021+0.7%-7.5%-12.6%
Q3 2021-3.2%-4.6%-0.4%
Q2 2021+4.3%+3.9%+7.8%
Q1 2021-0.2%-1.9%-3.0%
Q4 2020+1.7%+6.8%+8.1%
Q3 2020+4.3%+2.4%+10.1%
Q2 2020-3.4%-3.0%+5.6%
Q1 2020-3.6%+2.5%+28.1%
Q4 2019+2.5%+5.8%-11.3%
Q3 2019+3.0%+3.9%-1.9%
Q2 2019+2.3%+0.4%-11.4%
Q1 2019-3.3%-1.9%-11.5%
Q4 2018+0.3%+1.0%+5.6%
Q3 2018-0.6%-4.0%-1.1%
Q2 2018+1.7%+1.1%+0.6%
Q1 2018+3.5%+4.0%+9.1%
Q4 2017+1.5%+2.5%+9.0%
Q3 2017+14.1%+14.4%+24.6%
Q2 2017-11.1%-10.5%-7.2%
Q1 2017-0.7%-1.8%-1.4%
Q4 2016+0.3%+1.0%+6.4%
Q3 2016-1.3%-1.0%+4.7%
Q2 2016+1.4%-0.1%-1.2%
Q1 2016-4.2%
Q4 2015+7.8%
Q3 2015-0.2%
Q2 2015-3.3%
Q2 2014-3.3%
Q1 2014+4.2%
Q4 2014+4.2%
Q1 2015+4.8%
Q3 2014+3.9%
Q4 2013
Q3 2013
Q2 2013
Q1 2013

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