Company: APTV
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0001521332-25-000027
Chunk: 222

Company: Aptiv PLC
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 8
Chunk 222
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 and any remaining variances not included in Volume, net of contractual price reductions or Operational performance.

The automotive technology and component supply industry is traditionally subject to inflationary pressures with respect to raw materials and labor which may place operational and profitability burdens on the entire supply chain. For instance, the industry has recently been subjected to increased pricing pressures, specifically in relation to copper and petroleum-based resin products, which have experienced significant volatility in price. We have also been impacted globally by increased overall inflation as a result of a variety of global trends. Due to various factors, the industry has recently been impacted by increased operating and logistics challenges from certain global supply chain disruptions. For example, the rapidly evolving trade policies and tariff actions could result in increased pricing pressures on our global supply chain, which could adversely affect our business and financial results. In addition, during recent years, global economies were subjected to increased pricing pressure on semiconductors due to the worldwide semiconductor shortage. Although the severity of semiconductor related disruptions abated during the second half of 2023, we expect semiconductor supply cost and commodity cost volatility to have a continual impact on future earnings and/or operating cash flows. Management continues to seek to mitigate both inflationary pressures and our material-related cost exposures using a number of approaches, including combining purchase requirements with customers and/or other suppliers, using alternate suppliers or product designs, negotiating cost reductions and/or commodity cost contract escalation clauses into our vehicle manufacturer supply contracts and hedging. We have also negotiated, and will continue to negotiate, price increases with our customers in response to the aforementioned increased overall inflation and global supply chain disruptions.

52

Three Months Ended March 31, 2025 versus Three Months Ended March 31, 2024

The results of operations for the three months ended March 31, 2025 and 2024 were as follows: Three Months Ended March 31, 2025 2024 Favorable/(unfavorable) (dollars in millions)Net sales$4,825 $4,901 $(76)Cost of sales3,905 4,023 118 Gross margin920 19.1%878 17.9%42 Selling, general and administrative384 366 (18)Amortization51 54 3 Restructuring37 39 2 Operating income448 419 29 Interest expense(93)(65)(28)Other income, net— 15 (15)Income before income taxes and equity loss355