Shares of Adient PLC tumbled 12% toward a 19-month low in morning trade Monday, after the automotive seating company cut its fiscal 2018 outlook and said Chief Executive Bruce McDonald was stepping down, effective immediately. McDonald has led the company since its separation from Johnson Controls International PLC, which was completed in October 2016. Adient said its operating performance is “running behind plan.” As a result of lower earnings, increased cash restructuring and a negative working capital trend, the company cut its outlook for fiscal 2018 free cash flow to zero to $100 million from about $225 million and its guidance for adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to $1.25 billion from $1.40 billion to $1.45 billion. To succeed McDonald, Adient named Frederick Henderson interim CEO, while the company searches for a permanent replacement, and John Barth as interim chairman. Henderson was most recently CEO of SunCoke and Barth is currently Adient’s lead director. The stock has lost 36% year to date, while the S&P 500 has gained 4.1%.
Read on Market Watch