APTV

Aptiv's headline FY2025 looks disastrous — net income down 90.8% to $165M and diluted EPS down 89.2% to $0.75 — but the MD&A makes clear the collapse is overwhelmingly non-operational. Operating income fell from $1,842M to $1,184M, but $648M of that was a one-time goodwill impairment, with another $178M of separation costs in SG&A. Strip those out and the core business strengthened: net sales rose 3% to $20.4B on 3% volume growth (North America and Asia Pacific), and reported gross margin actually expanded to 19.1% from 18.8% on improved operational performance. The prior-year comparison was also flattered by a $605M net gain on equity-method transactions (vs only $46M in 2025) and a much lower tax bill, so the year-over-year EPS drop overstates the underlying deterioration.

The business itself is a diversified auto-electronics and connectivity supplier with real franchise value. R&D of $1.13B funds content growth (active safety, electrical distribution, connectors), and Aptiv generated $2.19B of operating cash flow against just $656M of capex — strong free cash flow. Management is returning capital (buybacks of $397M, share count down 7.3%) and pursuing a separation into focused businesses, which the $178M of separation costs reflects.