Aptiv PLC, an established player in the automotive technology sector, disclosed its financial performance for the fourth quarter of 2025 on Monday, with shares experiencing a decline in early trading following the announcement. The company posted U.S. GAAP revenues of $5.153 billion for the period, reflecting an increase from $4.907 billion in the comparable quarter the previous year.
On an adjusted basis, the company reported a 3% rise in revenues during the fourth quarter. This growth was primarily fueled by an 8% increase in North America and a 12% jump in South America sales, which were partially offset by marginal decreases of 1% each in Europe and Asia.
Aptiv's adjusted earnings per share (EPS) for the quarter stood at $1.86, slightly exceeding the consensus analyst estimate of $1.85. Similarly, revenue outperformed analyst expectations, reaching $5.153 billion against forecasts of $5.105 billion. However, on a U.S. GAAP basis, earnings fell relative to the prior year, a downturn attributed by the company to elevated tax expenses.
The company’s adjusted operating income for the quarter was $607 million, which corresponds to an 11.8% margin. Cash generated from operations amounted to $818 million during the quarter, reinforcing operational liquidity.
Performance by Business Segment
Aptiv's segment analysis revealed that the Advanced Safety and User Experience division recorded net sales of $1.419 billion, marking a 3% year-over-year increase. The Engineered Components Group registered revenues of $1.644 billion, an uplift of 4%, while the Electrical Distribution Systems segment achieved $2.302 billion in sales, up 8% from the previous year.
In terms of adjusted operating income, there was a 17% decline to $161 million for the Advanced Safety and User Experience segment. Conversely, the Engineered Components Group experienced an 8% increase in operating income to $270 million. The Electrical Distribution Systems segment saw a slight 2% decline, with operating income at $176 million.
The company noted that adjusted operating income was influenced by several factors, including enhanced operational efficiency partly stemming from cost reduction efforts. Nonetheless, these improvements were counterbalanced somewhat by increased commodity prices and foreign exchange impacts totaling $66 million in the fourth quarter and accumulating to $207 million for the entire 2025 fiscal year.
Starting in the first quarter of 2026, Aptiv announced plans to rename its Advanced Safety and User Experience segment to "Intelligent Systems," and the Engineered Components Group will be rebranded as "Engineered Components."
Capital Allocation and Debt Position
Throughout 2025, Aptiv engaged in substantial shareholder returns, repurchasing and retiring 22.8 million shares for $1.5 billion. Additionally, the company repurchased $300 million in aggregate principal of certain senior notes. As of December 31, 2025, Aptiv had $2.1 billion remaining under its $5.0 billion share repurchase authorization.
Regarding its indebtedness, the firm’s long-term debt stood at $7.47 billion at year-end, with short-term debt amounting to $81 million, highlighting the company’s leverage structure as it manages its capital resources.
Forward-Looking Guidance and Strategic Plans
Looking ahead to 2026, Aptiv forecasted first-quarter net sales between $4.950 billion and $5.150 billion. The projected U.S. GAAP diluted EPS ranges from $0.60 to $0.80, which is notably below analyst expectations of $1.77. On an adjusted basis, EPS guidance for the quarter is set between $1.55 and $1.75, compared to a $1.92 consensus estimate.
For the full fiscal year 2026, the company anticipates total net sales ranging from $21.120 billion to $21.820 billion, broadly in line with analyst estimates of $21.126 billion. The forecasted U.S. GAAP diluted EPS is between $5.75 and $6.35, compared with estimates of $7.21, while adjusted EPS is projected to fall between $8.15 and $8.75, slightly below the $8.46 consensus.
Additionally, Aptiv reiterated its plans to spin off the Electrical Distribution Systems business into a separate entity named Versigent. This strategic move will result in two distinct companies, each with focused market opportunities and tailored capital allocation strategies. The company provided pro forma 2026 free cash flow guidance of $650 million to $850 million for the newly structured Aptiv and $200 million to $300 million for Versigent.
Kevin Clark, Aptiv's chair and chief executive officer, emphasized that the spin-off will position both companies independently with optimized flexibility to pursue their unique paths in the market.
Market Response
The market reacted to the release with a decline in Aptiv’s shares, which fell 1.50% to $74.61 in premarket trading on Monday, reflecting investor caution amid lowered profit forecasts and strategic restructuring.