ArvinMeritor Inc.'s (ARM) fiscal third-quarter loss narrowed as
the auto-parts maker's sales jumped along with the auto industry's
recovery, and margins improved.
The bottom line results, however, missed analysts' expectations
and the company forecast fourth-quarter sales to be "slightly
lower" than the third quarter's $1.28 billion due to seasonal
customer shutdowns. Analysts polled by Thomson Reuters recently
projected $1.16 billion.
Shares fell 2% to $16.47 in light premarket trading. As of
Monday's close, the stock is up 50% this year.
ArvinMeritor has reported improved results in recent quarters as
trends in the American and European auto sectors improve. The
company has earned an upgrade out of highly speculative territory
from all three ratings agencies this year, with Standard &
Poor's Ratings Services saying the company's restructuring efforts
last year laid the foundation for greater profitability.
For the quarter ended June 30, the commercial- and light-vehicle
maker posted a loss of $3 million, or 3 cents a share, compared
with a year-earlier loss of $164 million, or $2.26 a share. The
company reported a 1-cent profit from continuing operations,
compared with a year-earlier loss of 47 cents. Analysts expected a
profit of 6 cents.
Sales climbed 35% to $1.28 billion, beating the company's upbeat
May projection of $1.21 billion.
Gross margin improved to 11.4% from 7.3%.
Sales increased 76% at its commercial-vehicle systems business,
its largest, and rose in all three of ArvinMeritor's other business
lines.
Chairman and Chief Executive Chip McClure said the company was
optimistic about the positive volume trends it saw in Europe and
North America, with the exception of military products. McClure
added there was continued market strength in South America, China
and India--particularly as the company moves to expand its business
in those regions.
The company reiterated its goal to complete the sale of its
light-vehicle systems business by the end of the year. As the
financial performance of that unit has improved, ArvinMeritor said
it no longer expects the sale to have a material effect on the
company's cash flows at the time of closing.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com