Drivetrain elements and programs producer American Axle & Manufacturing on Friday reported a first-quarter web lack of $5.1 million.

That is in contrast with web revenue of $1 million within the first quarter of 2022.

In a Friday morning name, executives attributed losses to new program launch prices, materials and labor inflation and market inefficiencies attributable to provide chain and semiconductor points. The corporate was dinged by vital buyer manufacturing downtime, particularly in full-size truck applications.

“The working surroundings stays dynamic, however we’re hopeful to see some stabilization within the second half of the yr,” CEO David Dauch mentioned on a name Friday.

CFO Christopher Could mentioned he expects launch prices to proceed into the second quarter however scale back within the second half of the yr. He expects labor inflation to stay all year long however is “cautiously optimistic” that present market volatility will progressively stabilize.

Shares in American Axle gained 9.9 p.c to $7.41 when the market closed Friday.

The corporate’s income rose 3.5 p.c to $1.49 billion, partially due to AAM’s acquisition of Tekfor Group.

AAM acquired Germany-based Tekfor, a producer of automotive fasteners and metallic fashioned elements for driveline, powertrain and e-mobility purposes, for about $136 million in 2022. Tekfor generated about $310 million in gross sales in 2021 and, in accordance with Could, was the first contributor to AAM’s development in gross sales this quarter.

The corporate’s yearlong outlook, concentrating on income of $5.95 billion to $6.25 billion, has not modified.

American Axle additionally mentioned Friday it has secured a contract with Chrysler father or mother Stellantis to produce electrical beam axles for a future electrical automobile program. This system is predicted to launch after 2025 and follows the announcement final yr that AAM would provide electrical drivelines to the Mercedes-AMG, the model’s first plug-in hybrid electrical mannequin, in addition to current offers with Jupiter Electrical Mobility and EKA mobility.

The corporate goals to proceed advancing its electrical portfolio. Dauch mentioned AAM is in dialog with a number of different automakers and expects “the momentum to proceed.”

“We’re clearly demonstrating our capabilities and worth proposition in electrical propulsion expertise and programs integration to the OEM group,” Dauch mentioned. “This can be a nice instance of how AAM is leveraging the axle heritage of the corporate with cutting-edge electrical propulsion expertise management of at the moment to drive our future development.”

R&D spending elevated by about $8 million over the primary quarter of 2022 as the corporate goals to assist new applications and develop its electrical capabilities.

The corporate estimates the addressable EV sourcing market to be about $20 billion to $30 billion by 2030 and goals to manage a ten p.c share of that market by that yr, in accordance with a presentation shared with traders in April.

Detroit-based American Axle ranks No. 43 on Automotive Information‘ listing of the highest 100 international elements suppliers, with worldwide gross sales to automakers of $5.16 billion in 2021.