(Reuters) - U.S. auto parts maker American Axle & Manufacturing Holdings Inc (AXL.N) shares rose more than 23 percent on Friday after it repeated its forecast for higher revenue after a record 2015.
The company that sprang from a General Motors Co (GM.N) division 21 years ago is benefiting from the shift toward pickup trucks and utility vehicles as it also continues to diversify toward its goal of having at least half its sales to non-GM customers by 2020.
"Clearly we're in the sweet spot with respect to trucks and SUVs and crossover vehicles right now and it's showing in our schedules and will show in our sales going forward," said American Axle Chief Executive David Dauch, in a conference call with industry analysts.
By Friday afternoon, American Axle shares were up 22.7 percent at $14.42, after hitting $14.48 earlier in the day. Before Friday, the shares had fallen nearly 40 percent since the start of the year. Still, after Friday's gains the shares were still down 24 percent this year.
The Detroit-based supplier that has as its core business making axles and other driveline components for trucks and utility vehicles affirmed its 2016 forecast given a month ago.
That forecast calls for EBITDA margins of 14.5 to 14.75 percent and free cash flow between $120 million and $140 million. Free cash flow for 2015 was $189.5 million, up 54 percent from a year earlier. The lower free cash flow for this year is related to higher capital spending for vehicle launches, Dauch said.
American Axle Chief Financial Officer Chris May said in an interview that the company has not seen any signs of a slowing of U.S. auto sales in 2016 after record-setting 2015 sales of 17.4 million vehicles.
American Axle continued to diversify its non-GM business, which was 34 percent of sales in 2015, from 32 percent in 2014 and 29 percent in 2013. American Axle affirmed its target that more than half of its business would come from non-GM customers by 2020.
In the fourth quarter, American Axle reported a 2 percent rise in revenue, and net income of $62.9 million, or 81 cents per share, from $13.2 million, or 17 cents per share, a year earlier.
Total net sales rose to $958.4 million from $939.5 million in the quarter ended Dec. 31. Full-year sales were $3.9 billion and the company said sales will be about $4 billion in 2016.
Reporting by Arunima Banerjee in Bengaluru and Bernie Woodall in Detroit; Editing by Sriraj Kalluvila and Meredith Mazzilli