Aptiv PLC (APTV) Earnings & Analysis

Latest quarter

Aptiv’s third-quarter revenue beat the consensus by 1.1%, while adjusted earnings per share beat it by 6.8%. The company reported revenue of $3.2 billion, compared with $5.2 billion a year earlier; the earlier period included the Electrical Distribution Systems business, which Aptiv separated in 2026.

On the call, CFO Varun Laroyia said adjusted revenue grew 2%, with non-automotive growth offsetting an automotive decline. He said Engineered Components grew across regions, while Intelligent Systems revenue fell as software and services declined and German luxury automaker programs weighed on automotive sales.

Aptiv reported gross margin of 21.6%, compared with 19.5% a year earlier, and operating margin of 8.78%, compared with −3.36%. Free cash flow was $320.0 million, unchanged from a year earlier. Diluted earnings per share were $0.94, compared with −$1.63.

Aptiv’s adjusted revenue growth exceeded the 1% midpoint it had forecast for the quarter; its adjusted earnings per share of $1.42 were above its earlier $1.25–$1.35 range.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Kevin Clark said Aptiv secured roughly $4 billion in new business awards during the third quarter and more than $13 billion through the quarter. He said non-automotive awards reached $3.8 billion, more than double the year-earlier amount, as Aptiv expanded into markets including drones and robotics. In China, he said bookings grew 30%, with more than 20% tied to export programs.

Clark said Aptiv launched a driver-assistance camera for a Chinese automaker’s European exports and won new driver-assistance business using localized technology. He also said the company received an award to replace competitors’ vision, parking and surround-view systems with an integrated Aptiv platform. Clark cautioned that “award cycles may lengthen” while Aptiv negotiates commercial recoveries and price increases.

Laroyia said third-quarter adjusted EBITDA margin fell because of product mix, including lower software revenue, the timing of engineering credits and commodity costs. For the fourth quarter, he expects customer recoveries, engineering credits and manufacturing performance to support the sequential margin increase. He also expects software and services revenue to decline year over year because of the timing of enterprise awards.

Looking to 2027, Clark said supply constraints, higher input costs and vehicle affordability could disrupt production or demand. Laroyia estimated approximately $700 million in semiconductor price inflation, primarily for memory, which he said would create a revenue benefit through pricing and recoveries. He also expects program roll-offs and lower China exports at two German luxury automakers to continue affecting Intelligent Systems through 2027.

Asked about recovering inflation and the associated working-capital costs, Clark said Aptiv was negotiating semiconductor increases with customers. Laroyia said the company needed customer funding commitments and was reviewing capital spending and supplier arrangements; he declined to give a 2027 cash figure. Clark said Aptiv had invested in buffer stock for select customers and was using alternative sourcing and product validation to address supply risks.

Guidance

Laroyia said Aptiv narrowed its full-year revenue range while maintaining income-statement guidance at the midpoint. Aptiv forecasts 2026 revenue between $12.65 billion and $12.75 billion.

Aptiv lowered its full-year free cash flow midpoint by $25 million to $650 million, citing higher inventory investment, and narrowed the range to $625-$675 million. Clark said Aptiv plans to repurchase at least $650 million of shares by year-end, compared with its earlier intention to repurchase more than $600 million.